Real Estate Agent’s Duties to Disclose
The buyer and seller each have duties to disclose material (important information) to the other. In turn, their respective real estate agents each also have the duties to deal fairly and honestly with all parties to the transaction and to disclose material information about the property or the buyer’s ability to perform to the other parties to the transaction. The Arizona Administrative Code, R4-28-1101 (B) specifically provides that
A [real estate] licensee participating in a real estate transaction shall disclose in writing to all other parties any information the licensee possesses that materially or adversely affects the consideration to be paid by any party to the transaction, including:
1. Any information that the seller or lessor is or may be unable to perform;
2. Any information that the buyer or lessee is, or may be, unable to perform;
3. Any material defect existing in the property being transferred; and
4. The existence of a lien or encumbrance on the property being transferred.
Berk & Moskowitz, P.C. has handled numerous claims for misrepresentation or omission against sellers and real estate agents.
For example, in Sawko v. Jackson Properties, Berk & Moskowitz, P.C. filed suit against the seller/developer because, among other things, its agents falsely represented that a nearby dairy was being closed. The Court found the seller liable for misrepresentation and consumer fraud, ordered full rescission, $15,000 of damages for emotional distress and attorneys’ fees.
In another case, Bergmayr v. Century 21, the firm filed suit against the sellers and their agent for failing to disclose that the property was used to breed and kennel large numbers of dogs. The problem was discovered when the buyer’s daughter and grandson suffered severe allergic reactions to the home. The Court found the real estate agent 95% at fault and the seller 5% at fault, and ordered the payment of $60,000, representing the difference between the purchase price and the value of the property at the time of close of escrow, plus attorneys’ fees.