Real estate agent liability Re: Any recourse?

Objet: Real estate agent liability Re: Any recourse?
À: "panama laws for expats"
Date: Dimanche 8 Novembre 2009, 11h57

http://www.kuluttajavirasto.fi/Page/60662588-3611-4ed9-9ca7-20896bd7df40.aspx# The real estate agent's liability for defects The agency is not responsible for concealed defects in the apartment The agent does not have general liability for defects in the apartment, for example damage from humidity discovered after conclusion of the sale or other concealed defects. The seller of an apartment or real estate is liable to the buyer for defects - including the information provided by the agent prior to sale and any defects in that information. The agent is not liable for e.g. incorrect information on the house manager's certificate, unless the agent had reason to believe that the information in question was incorrect. The seller is liable in such situations. On the other hand, the agent has a far-reaching liability for the legality and quality of his brokerage work. For instance, if information regarding a humidity defect is noted in the brokerage contract, but the agent fails to disclose this to the buyer, the agent has made a mistake in his work. Under such circumstances the agent is liable for any damages suffered as a result of the mistake. If the agent's work performance is not up to the agreed standard, the customer may request that the commission is decreased. Get help from the consumer advisor and file a complaint if necessary If you have questions on any ambiguities regarding the work of real estate agents, contact the consumer advisor. The consumer advisor gives counsel regarding the legislation and rules governing the work of real estate agents and, if necessary, directs consumers forward, for instance to file a complaint with the Consumer Disputes Board. Disputes over real estate transactions are sometimes unclear as to who is liable for incorrect or incomplete information supplied with regards to the apartment - the real estate agent or the seller. In this case the complaint should be filed against both parties. Complaints regarding real estate agents may be filed with the State Provincial Office. The State Provincial Office may issue a warning to the real estate agent, force temporary closure of the agency or have them removed from the register of real estate agents. The State Provincial Office may not, however, order a real estate agency to pay damages or compensation. http://www.ncrec.state.nc.us/bulletin/vol11-2bulletin/courts_rule_on_issue_of_misrepre.htm COURTS RULE ON ISSUE OF MISREPRESENTATIONS Summarized below are several recent court cases involving misrepresentations in real estate transactions. These cases illustrate what appears to be the current trend in judicial thought away from the traditional concept of "caveat emptor" (Let the buyer beware) and towards the more modern, consumeroriented philosophy of "caveat licensee" (Let the licensee beware). WASHINGTON -Summary of Facts: A "listing broker" gave a "selling broker" an incorrect description of the boundary lines of a property. Although information on file with the listing service clearly contradicted the listing broker's statements to the selling broker, the selling broker relied on the listing broker's statements and transmitted the incorrect information to a buyer. The buyer discovered the error after closing the transaction, and subsequently filed suit against both the listing and selling brokers, alleging misrepresentations. Decision: The court ruled in favor of the buyer, stating that the listing broker (although an agent of the seller) was, nevertheless, liable to the third party for the misrepresentations- that the listing broker was also liable for the actions of his subagent (i.e . , the sell ing broker) whom he authorized to transmit the incorrect information; and that the selling broker was also liable because he failed to exercise reasonable care and skill to discover the error. MAINE-Summary of Facts: A purchaser of a lot filed suit against a seller for fraudulently representing that the lot had been approved for installation of a septic tank; the purchaser made no independent inquiry to determine the accuracy of th 11 representation. Decision: The court ruled in favor of the purchaser ' stating in part that "A plaintiff may justifiably rely on the fraudulent misrepresentation of a defendant, whether made intentionally or recklessly, without investigating the t'ruth or falsity of the representation. Reliance is unjustified only if the plaintiff knows the representation is false or its falsity is obvious to him". (Although the defendant in this case was the seller, the same reasoning would also seem to apply equally to agents of a seller.) IDAHO-Summary of Fact: A broker had made representations to a buyer which were based upon i'ncorrect information supplied by a seller. The buyer filed suit against the broker for making misrepresentations, but the broker claimed that he was only acting as a "conduit" for information flowing from the seller to the buyer. Decision: The court, in its ruling, stated that "(T)he real estate agent (broker) will be liable to a prospective purchaser if he knew or should have known that the representations were inaccurate or if he could have, by reasonable investigation, determined the accuracy of the representations." ALABAMA-Summary of Facts: A seller who knew his house had a faulty septic tank did not reveal this defect to his broker. A subsequent buyer of the property filed suit against both the seller and the broker for failure to disclose this defect. Decision: The court ruled in favor of the buyer stating that although the broker did not have actual knowledge of the defect, the broker (as agent for the seller) was obligated to learn about any deficiencies and to inform prospective buyers of such defects. TEXAS-Summary of Facts: A broker who was selling his own property failed to advise the purchaser that the foundation of the structure on the property had settled and needed repairs. The purchaser subsequently filed suit against the broker/seller. Decision: The court ruled in favor of the purchaser, stating that a seller has a duty to reveal known defects to purchasers. (Although the defendant in this case was a seller, the same reasoning would also seem to apply equally to agents of a seller.) NORTH CAROLINA -Summary of Facts: A purchaser of a house and lot filed suit against a builder, alleging that the builder had failed to disclose that the house had been built on "disturbed soil" (the house was constructed over a large hole filled with debris and then covered with clay). Decision: The court ruled that "Since this defect in the lot and the house . . . was not apparent to plaintiffs (the purchasers) and not within the reach of their digilent attention and observation, defendant (builder) was under a duty to disclose this information to plaintiffs". (Although the defendant in this case was a builder/seller, the North Carolina Supreme Court held in a related case that a real estate agent would also have come within the rule applied in this case if the agent knew or had reason to believe that the builder had constructed the house on "disturbed soil" yet withheld this fact from the purchasers.) Although several of the cases cited above were not decided on the basis of North Carolina law, North Carolina real estate brokers and salesmen should be well aware of the principles set forth in all of these decisions: These principles, simply stated, are (1) that a real estate agent who intentionally or unintentionally gives a purchaser incorrect or incomplete information may be held liable for such statements even though the source of the incorrect information was the seller or another broker, and even though the purchaser could have verified the information himself; (2) that a seller and nis agent have an affirmative duty to disclose to prospective purchasers any latent (hidden) defects connected with the property (for example, faulty septic tank, leaky basement, etc.) about which they are aware or should reasonably be aware,- and (3) that although a real estate agent owes his primary loyalty to his principal, (usually the seller), the agent must treat all parties in the transaction fairly. Furthermore, if a licensee has actual knowledge of material facts regarding a property (or should reasonably have known of such facts), but the licensee fails to disclose these facts to a prospective purchaser, then such nondisclosure may subject the licensee to disciplinary action by the North Carolina Real Estate Licensing Board. --From information published in the Idaho Real Estatement, California Real Estate Bulletin, Mississippi Real Estate Hotline, and the Washington Real Estate News.