Realtor Disclosure Obligation

[EJ]

Last year I bought a house built in 2006 that had been foreclosed. It was one of 5 model matches that all went through foreclosure and have been resold. I signed all kinds of “as-is” forms when I closed since the owner (property holding company) never occupied the house.

Since moving in I have found signs of previous water damage (inspector did not find it). The house next door actually had some flooding last Dec when we had all the rain. My house did not flood last Dec and I believe the problem has been corrected with the addition of french drains around the foundation (the flooded neighbors do not have french drains).

I think the realtor, and property holding company, knew of the flooding and installed the drains. The neighbors on my other side said they saw all kinds of digging going on around the foundation just before it was listed.

Here is my question: I used the listing agent as my realtor for the transaction. Isn’t he obligated by law to disclose anything he knows about the property (such as previous flooding) since he is representing my interests? Do you think it is worth it to sue him or the property holding company? Would I have a chance, even though I signed all the “as-is” forms? I feel like the realtor especially is obligated to represent my best interest, since he received the buyer’s side agent commission. I would like to at least sue him for the buyer commission since he was clearly not representing my interests. Anyone recommend a good lawyer for this type of issue?

thanks,
EJ

[sdsurfer]

Yes…the listing agent is obligated to disclose anything they know about the property, but what makes you think they were aware of it when the home inspector did not catch it?

Completely my opinion, but I would be thankful that your home did not flood like your neighbors did and that whoever did it took steps to remedy the situation.

Let me get this straight…you signed documents stating you were all right with the property “as is”, but now your upset with how the property “is”?

If it were me…it would not be worth it, but I am a very lawyer averse person. It might be worth mentioning that you could have had another agent represent you in the transaction if you did not trust the listing agent, but you chose to go with the listing agent and that is why they received the buyers side of the commission.

[EJ]

I believe the listing agent (who was also my buyers agent) knew about the flooding and did not tell me. He hired the contractors to do the repairs based on what my neighbors have told me. The house came with new carpet and paint which covered up the damage (for which the LA also hired the contractors), which is why the inspector couldn’t find anything.

The documents I signed release the OWNER from disclosure obligations with the reason stating that they never lived there. However, they did know about the flooding since they paid to remedy the problem. Regardless, my main beef is not with the owner but the LA.

The LA signed documents saying he would represent my best interest, which he clearly did not if he knew about the flooding and did not tell me. My main question to the board is: If he knew about the flooding and did not disclose, is this illegal? If he did know about the flooding and I can prove via statement from the contractor about who hired them, would I have a case?

Honestly, I don’t care if legal fees eat up all of any potential settlement. I just don’t want the agent profiting illegally and hopefully give him some incentive to honor his obligations as an agent in the future.

[urbanrealtor]

This is a post I think anyone not using a buyer’s agent should read.

Yes.
The double-ending agent was supposed to represent your interests as well.

Banks and REO agents will tell you that they have no obligation to disclose anything ever.

That is not entirely true.

They are not obligated to disclose things that they could not reasonably be expected to know.

Like are the neighbors they have never met cooking meth.

However, if they fucked with the drainage to deal with water damage problems that is very different.

Here are the names of 2 good attorneys:

Shanna Welsh
619-232-7325
[email protected]

Mike Spilger
[email protected]
619-232-7761

[patb]

Listing agents only want the deal to close.

Buyers agents only want the deal to close.

The only person with your interests at heart at the table, is an attorney you hired.

Lets be realistic.

1) The LA Lied ( you can prove it for a couple of grand)

2) The damages were mitigated. (French Drains, new carpet)

3) What’s your harm? Your feelings are hurt? You would have bid lower?

So you think you might have bid 10K lower? You have the house now, You retain an attorney and that will cost you 5K minimum, maybe more if they go to court.

Fuck it, suck it up.

Every used house has issues, every new house has issues.

Be glad the neighbors aren’t making meth.

[EJ]

@UR – thanks for the referrals, if I go that route I will definitely contact them. I will PM you first to see if you want me to credit your real name with the referral.

@patb – I am not sure the damages are completely mitigated. I fear I will need to do more work on the french drains which is a huge pain. Yes, I would have bid lower, or more likely, backed out altogether had I known about the previous flooding. Drainage problems are not easily corrected, it may flood again if we reach a greater rainfall rate. I will never really know and it will always be on the back of my mind.

In general, I really like the house. I am glad the neighbors are not making meth. However, I feel like laws meant to protect me were broken in the selling process. You are right, it is probably easier to just forget about the disclosure issue and move on. Does that mean it is the right thing to do? I don’t think it benefits anyone except for crooks to knowingly let crimes go unpunished.

[sdduuuude]

I’m not a lawyer but I think you have a reasonable gripe. Patb’s comments are sort of true, but you aren’t so concerned about the drainage issue, but about the conduct of the realtor and if you can hold the realtor’s feet to the fire, go for it.

Also, signing something that says you are willing to deal w/ the property “as is” is not the same as signing something that says you waive your right to disclosure.

Maybe talk to a lawyer first to understand the strength of your position. Then call the agent’s broker directly, tell him/her your plans and see if they’ll refund you enough cash to keep you out of court. Definitely threaten to go after damages as well as your legal fees also.

[SD Realtor]

Agreed with what Dan Said completely…. and to add some of my own thoughts…

One of the primary obligations of any realtor involved on any side of a transaction is do disclose any and all material facts regarding the property. It does not matter how they came to know about the facts, whether by visual inspection, whether by working with the property manager that did updates to the home prior to it being listed etc…

So yes it seems that if you feel there are material facts that you are just now finding out about, that would have been important for you to know during disclosure then you should act. With that said, the burden of proof is on you to find out about these material facts to make sure they do exist. Sounds like finding out who the property manager was and trying to dig up what work was done on the home is the way to go but it will require legwork. I agree about talking to an attorney as well. However you will need to open your wallet.

Going back to what Dan was saying anyone that is going to work through the listing agent should take note that without an advocate for you, then you are on your own. Ed perhaps it didn’t occur to you then but maybe asking that listing agent point blank for a detailed list of any and all repairs that were done to the home since he obtained the listing may have been a good idea. Even asking him to put in writing that none were done or that he checked with the property management company and none were done may have really helped you. Also when extensive work is done, usually a good physical inspector will be able to point that out as well. So… perhaps the quality of your inspection may have been lacking as well.

[(former)FormerSanDiegan]

[quote=EJ]

@patb – I am not sure the damages are completely mitigated. I fear I will need to do more work on the french drains which is a huge pain. Yes, I would have bid lower, or more likely, backed out altogether had I known about the previous flooding. Drainage problems are not easily corrected, it may flood again if we reach a greater rainfall rate. I will never really know and it will always be on the back of my mind.

[/quote]

The drains were there when you purchased, so why would you not expect to do some work related to those drains in the future. patb has a good point. You can’t successfully sue unless you have damages.

So, what are your damages ?

[EJ]

I am not saying I expect to do no maintenance but the repair is sub-standard (I do not want to get into details, but trust me, the repair work is poor). More importantly, wrt damages, I was sold a house that was valued as not having flood history, when in reality there was a flood history, hence reduced value. The Realtor, who was legally obligated to serve my interests, covered up the problem and lied to me. I think this is illegal and am wondering if I should pursue him in court.

I appreciate all the discussion. thanks!

[EJ]

@SDR – thanks for the comments. I wish I had thought to ask for a list of repairs as you suggested. To say I am pissed at the inspector would be an understatement, it seems obvious to me now, had I known what to look for.

[patb]

Well, you have a possible redress in Small Claims court.

There are actions there, and, a sypathetic judge
may give you $2K or whatever the limit.

it’s enough of a sting, that the realtor won’t forget that.

BTW, all houses need work.

It’s one of the hassles of being an owner vs a renter.

[Author]

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