real-estate-lawsuit

This months New England Real Estate Journal has an interesting article regarding a lawsuit that was filed by a homebuyer against a Century 21 real estate agent and his seller. The issue at hand was the real estate agents MLS listing show sheet with regards to the square footage data.

On June 30, the Court issued an Opinion in Bowman v. Presley (this case was in Oaklahoma) which reversed prior rulings and permitted a lawsuit by the buyers to go forward against both the sellers and the listing REALTORS® in a dispute over square footage. REALTORS® who listed a house for sale with a stated square footage “per courthouse records” now have to defend, along with the sellers, the square foot amount even though they were just passing information on to buyer, according to a decision in a civil lawsuit brought by the buyers in Pottawatomie County.

The house at issue in the lawsuit was listed in 2005 as having 2,890 square feet, which matched the County Assessor ’s data. The house was listed for sale by a REALTOR® who was also the mother of the seller. After closing, the buyers obtained a copy of their lender’s appraisal, which measured the house size at less than 2,200 square feet. The buyers also obtained an appraisal completed for the sellers five years earlier, from the same appraiser, which had also stated that the house was less than 2,200 square feet. A third appraisal by the same appraiser, also five years earlier, had indicated that the house was 2,468 square feet. With so many different figures, the Court ruled that the issue of the house’s actual size was unclear.

The REALTORS® argued that the buyers had signed closing releases and had ample time to inspect and measure the house before closing. The REALTORS® asserted that the listing information accurately quoted the Pottawatomie County Assessor’s data for tax assessment purposes and that the MLS listing included a disclaimer that the data presented might not be accurate. They also asserted that the purchase contract itself contained a disclaimer acknowledging that the REALTORS® would not be held responsible for inaccurate square footage information.

In its recent opinion, the Court held that the particular facts of the case raised a question of whether the REALTORS® had misrepresented the property size “unreasonably, recklessly or dishonestly.” Bypassing the several disclaimers and releases, the Opinion implies that passing along inaccurate square footage data allows a negligence claim based on the licensee’s duties pursuant to the Real Estate License Code regardless of any contrary express contractual terms. The Court’s decision allows the buyers a trial even if they saw a disclaimer by letting them challenge whether the REALTORS® knew or should have known, in the exercise of “reasonable skill and care,” that the courthouse information quoted in the MLS listing was inaccurate.

File under: cavet emptor & broker beware

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