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#419274 - 01/29/13 08:12 PM This is Why It's Important to Know Your Real Estate Statutes. YIKES!
TonyGarciaLoans Offline
Member

Registered: 01/29/13
Posts: 19
Loc: US
Homeowner Sues Realtor for Not Disclosing Property Stigma

In PA, a woman who purchased a home sued the former homeowner and Realtor for not disclosing that the property was site to a murder-suicide one year before purchase. The current homeowner feels that this information was intentionally withheld, and therefore sued for fraud and misrepresentation. While the trial judged ruled in favor of the defendants - saying that PA law does not require such disclosure be made - a panel of the state appeals court was split on the decision. The homeowner is now appealing to the state Supreme Court.

This should be a motivator for all Realtors to fully understand their state's law with respect to such matters. What does your state consider a property stigma? Are you required to treat property stigmas as a material defect, thereby disclosing them?

In the commonwealth of Virginia, the law is (thankfully) very clear here:

According to the Virginia Residential Property Disclosure Act § 55-524

A. Notwithstanding any other provision of this chapter or any other statute or regulation, no cause of action shall arise against an owner or a real estate licensee for failure to disclose that an occupant of the subject real property, whether or not such real property is subject to this chapter, was afflicted with human immunodeficiency virus (HIV) or that the real property was the site of:

1. An act or occurrence which had no effect on the physical structure of the real property, its physical environment, or the improvements located thereon; or

2. A homicide, felony, or suicide.

But, the PA issue does get me thinking...do you agree that the events mentioned in #2 should not be disclosed to buyers? As a Realtor, liability is certainly a legitimate reason to agree with this law, but what if you take the position of a buyer? Do you still agree that the burden to investigate such matters should fall solely on the buyer?

Either way, it will be interesting to see how this plays out in PA.



Edited by DueDiligence (01/29/13 08:15 PM)
Edit Reason: URL

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#419342 - 01/30/13 05:13 PM Re: This is Why It's Important to Know Your Real Estate Statutes. YIKES! [Re: TonyGarciaLoans]
Musa Opondo Offline
Member

Registered: 09/24/12
Posts: 210
Loc: USA
Because of the stigma associated with homicide,felony or suicide it would be best to disclose.I believe there are still those buyers who do not consider these a big issue.

I wonder why the PA case is still going to appeal if the State law does not require such disclosure.

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#419378 - 01/31/13 01:04 AM Re: This is Why It's Important to Know Your Real Estate Statutes. YIKES! [Re: TonyGarciaLoans]
REAddict Offline
Member

Registered: 08/30/12
Posts: 34
Loc: Tempe, AZ
Depends on the state law. I know in AZ you do not need to disclose this.

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#419429 - 01/31/13 08:38 PM Re: This is Why It's Important to Know Your Real Estate Statutes. YIKES! [Re: REAddict]
Dodger52 Offline
Member

Registered: 10/14/11
Posts: 266
Loc: Montana
It doesn't sound like knowing the statute is going to help the listing agent. The LA followed the letter of the law, and is being forced to pay for a legal defense (probably much more than the commission). Most laws regarding fraud are written in just such a way, that even though the actions may be legal, if the intent is to defraud it is illegal. So it will come down to whether or not the seller and the listing agent believed that the home was worth less because of its history. The outcome of this case could change the way we all approach this situation.

If you as a professional believe that something effects a homes value, than you should disclose it whether or not you are required to by law. The seller is free to use a different agent if they disagree with you. There are listings that are not worth taking, most of the time its because of the seller, not the property.
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Prudential Montana Real Estate
www.MT-RE.net
www.facebook.com/MissionValleyMTHomes

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#419791 - 02/07/13 06:35 AM Re: This is Why It's Important to Know Your Real Estate Statutes. YIKES! [Re: Dodger52]
jasminewilliams Offline
Junior Member

Registered: 11/27/12
Posts: 2
Loc: CA
Hi,
No need to disclose this with anyone






[url=http://www.themarellygroup.com/guide/Bonsall]Bonsall Real Estate[/url] Bonsall Real Estate


Edited by jasminewilliams (02/07/13 06:40 AM)

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#420197 - 02/14/13 02:43 PM Re: This is Why It's Important to Know Your Real Estate Statutes. YIKES! [Re: TonyGarciaLoans]
fsna.heidi Offline
Member

Registered: 02/05/13
Posts: 41
Loc: USA
I think this issue depends on the state where you live in. Agents and owners often keep these issues as a secret so that they can sell the property. The value of the property are sure to get low if it's involved in any crime.

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#420292 - 02/16/13 03:27 AM Re: This is Why It's Important to Know Your Real Estate Statutes. YIKES! [Re: TonyGarciaLoans]
Scintillion Offline
Member

Registered: 01/26/12
Posts: 437
Loc: Colorado, USA
Definitely important to know your local laws, rules and regulations. Great post. Thanks for making everyone aware. smile

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#420330 - 02/17/13 12:32 AM Re: This is Why It's Important to Know Your Real Estate Statutes. YIKES! [Re: Musa Opondo]
LizL Offline
Major Contributor

Registered: 08/27/05
Posts: 1795
Loc: Missouri
Originally Posted By: Musa Opondo
...I wonder why the PA case is still going to appeal if the State law does not require such disclosure.
I agree, Musa! If state law does not require it, why are they now thinking of REQUIRING it?

Missing from this discussion, however, are the specifics of agency representation. Did the listing agent also sell the property? If so, was it properly disclosed that the agent represented the seller?

It's tough to form an opinion without that set of facts.
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REO listing/selling since 2004; BPOs only for current clients

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