Legal Library

REPC Addenda – Ethics

January 15, 2020

Author: Curtis Bullock

Realtor® Legal Tip – 1) Should the Buyer’s agent review the seller disclosure form? 2) Should the Listing Agent fill out the seller disclosure form?

I just read a case that was litigated in Texas on these two issues. Here’s the quick facts: First time home Buyer and Seller go under contract. The Seller gives the seller disclosures to the Buyer and the box was checked “yes” where it asked whether the property had experienced flooding. The Buyer’s agent gave a copy to the Buyer but did not explain to the Buyers that they should get a further explanation about the flooding. The transaction closed. Shortly after closing, the Buyers experienced flooding and learned that the property had been flooding for years. The Seller’s told the Buyers that they told their Listing Agent about the flooding and that the Listing Agent filled out the disclosure form for them.

The Buyer’s sue their own agent for negligently failing to advise them that they had not received all the required information about the flooding. The Buyers also sue the Listing Broker and Agent for fraud and negligent misrepresentation. The court ruled in favor of the Buyer and against the Buyer and Listing Agents.

Lesson learned on this one is 1) Buyer Agents should check the seller disclosure form and if there are unanswered questions, seek out those answers from the sellers; and 2) Listing Agents should never fill out the seller disclosure form. Only the seller should accurately fill our the disclosures.

**** Another lesson learned is that having an experienced expert Realtor® on your side when buying or selling your largest investment is vital.