For Seller's Agents and Brokers
The Requirement for RESPONSIBLE DISCLOSURE is YOURS...
For Seller's Agents and Brokers
The Requirement for RESPONSIBLE DISCLOSURE is YOURS...
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The Requirement for RESPONSIBLE DISCLOSURE is YOURS...
The requirement to Disclose material Facts and Defects in a clear and complete manner as part of the sale of "Used Homes" being sold "As Is" (without a warranty for future performance) applies to the Seller as well as any Real Estate Brokers and Agents engaged to support the sale.
The idea that Brokers and Agents must "Disclose", in addition to Sellers, may not be intuitive until it's explained, which we'll do with an example momentarily.
A failure to Disclose a material Fact or Defect results in legal claims from a Buyer for "negligent misrepresentation" or "fraudulent misrepresentation" against Sellers and/or Agents and Brokers, as appropriate.
If a failure to disclose is related to information that both the Seller and the Agent/Broker had, Conspiracy to Commit Fraud, Fraud and other charges may apply.
Any defects not disclosed by a Seller or an Agent during the Bid Consideration process and prior to Contract Acceptance did NOT exist in the BUYERS MIND at the time the BUYER considered all Property Details and selected a monetary value for his/her offer.
Intentionally or Accidentally, if the Seller "mis represented" facts that had
a value to the Buyer, that led to damages in the form of "over offering".
The home must delivered to the Buyer at time of Payment and Deed Conveyance without any defects not know to him/her at time of making an offer.
Failure to do this results in the realization of damages due to misrepresentation, be those damages known or unknown at time of Payment and Deed Conveyance.
If a "misrepresentation" is found after Payment and Deed Conveyance, the value of the mis-representation is due to the Buyer from the Seller and/or Brokerage, and additional legal fees and penalties may apply. In cases of Fraud, treble damages may apply and Criminal penalties may also be brought by the State, with fines and even jail time for serious offenses.
Situations in which Misrepresentation is found after Contract Acceptance
and BEFORE Payment and Deed Conveyance
If a "misrepresentations" is found after Contract Acceptance and Before Deed Conveyance, the Seller can 1) fix the defect, so the home is delivered without it, as was agreed upon or 2) the seller can reduce the price of the home for the value of the defect.
There's no other options to avoid legal liability.
In a theoretical world, if the Seller wants to claim he/she did not know about the defect, that's fine, but the theoretical conclusion is, had s/he known about it, s/he would have 1) fixed it before listing the home or 2) LOWERED THE ASKING PRICE by the value of the defect in conjunction with disclosing the defect.
Beating a Dead Horse from Another Perspective now ...
Beating a Dead Horse from Another Perspective now ...
A Seller's Failure to Disclose Defects results in an "over offering" for purchase,
and the amount "over offered" are the damages incurred at time of CONTRACT ACCEPTANCE and realized at time of Deed Conveyance,
assuming the financial damage from non-disclosed facts and defects are not corrected between time of CONTRACT ACCEPTANCE and PAYMENT/Deed Conveyance.
A Seller's Failure to Disclose Defects results in an "over offering" for purchase,
and the amount "over offered" are the damages incurred at time of CONTRACT ACCEPTANCE and realized at time of Deed Conveyance,
assuming the financial damage from non-disclosed facts and defects are not corrected between time of CONTRACT ACCEPTANCE and PAYMENT/Deed Conveyance.
!! IMPORTANT NOTE !!
Damages from Mis Representation are incurred at time of Contract Acceptance.
The defects and damage may not be known to the Seller if it was an honest oversight,
BUT that does NOT relieve the seller from Liability!!
The Seller's Job was to be a RESPONSIBLE SELLER.
An oversight in disclosure is a RESPONSIBILITY FAILURE for the SELLER.
Accidentally or Intentionally is of far less importance,
unless a case for TREBLE DAMAGES is being made.
For the " I want to Cheat" people...
For the " I want to Cheat" people...
Whenever Prospective Sellers learn this information, some will ask, "But what if I didn't know about it or just pretend I don't?'"
Ethical Agents and Brokers interested in trying to steer clear of BROKERAGE Violations and Conspiracy to Commit FRAUD and FRAUD might say...
"You are selling a used home in a unique type of transaction where you have to declare all defects BEFORE the Buyer gets to do due diligence."
"The buyers due diligence is to confirm the defects you disclose not to 'find them'."
" Thus, it is YOUR JOB and YOUR RESPONSIBILITY to know what you are selling. "
"To Avoid problems and claims for misrepresentation, you MUST BE a responsible seller and you should consider hiring people to help you know what you are selling. If they lie for you, it's like you lying for you. Their lies become yours"
"Then you can make all proper disclosure statements to protect yourself and avoid problems."
If they don't like that, I walk away.
However.
If there are other AGENTS and BROKERS in the marketplace
who support the cheating, I'm the only one who loses out,
until they ALL lose out someday.
BINGO!!!
As much as Seller's might want to "try to slip something by" a Buyer
and even their own Agent,
if that attempt is made, the ILLEGAL ACT of MISREPRESENTATION is cemented at time of CONTRACT ACCEPTANCE,
making the time of Discovery irrelevant and
ALL OF THAT makes the DISCLOSURE PROCESS a requirement
PRIOR TO CONTRACT ACCEPTANCE!!
Broker Involved Disclosure Fraud (BIDF)
Broker Involved Disclosure Fraud (BIDF)
As for "BIDF" (Broker Involved Disclosure Fraud):
If a Broker becomes privy to a Defect and s/he realizes the Seller is not planning on disclosing it, or did not disclose it, or seemingly wasn't aware of it, a failure to force the seller to disclose it or to disclose it personally would result in "Negligent or Fraudulent Misrepresentation" for the Seller, because they are the Principal in the transaction and ultimately responsible for their Agent/Broker. It may/would also result in ,"Negligent or Fraudulent Misrepresentation" for the Broker/Agent, and it could result in "Conspiracy to Commit Fraud" for the Seller, Agent, and Broker.
If a Broker or Agent becomes privy to a defect the seller says they've never noticed, the Broker/Agent must Disclose it and the Seller must acknowledge the statement.
This may sound like an odd situation but it can exist easily and regularly, especially if the seller is living elsewhere during the marketing and sale of their home.
A failure for the Seller to properly acknowledge the Broker's Disclosure with their own signature would be " odd". Why might a seller want to not sign a disclosure made by their Agent to protect both of them? Does that seem like an odd scenario to introduce now? I'm here to tell you, far stranger things than that happened in our transaction, and that's what drove this website into being.
As much as Brokers and Agents don't want to have difficult conversations about
DISCLOSURE with Potential Sellers,
because many Sellers want to be unethical...
AND
As much as "unethical" Brokers and Agents want this NOT to be a real thingy
so they can cater to them with greater ease...
Wishing away DISCLOSURE ED responsibility and oversight is patently ILLEGAL.
Surely the Professional Licensing Courses and required Continuing Ed
makes this ALL CLEAR from Day 1. RIGHT ???
If not, is that the kind of omission that "might" make HELL MELT
from too much HEAT when the masses found out?!?
All of this should be, "common knowledge" across the Country,
and even the "GLOBE" for that matter.
What's been going on in California, and FOR HOW LONG?!?!
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When the details of this fully story come to light,
440,000 Licensees need to be banished from the California Brokerage Industry,
along with ALL the Licensed Attorneys who covered this thing up.
As for the The California Department of Real Estate?
That would need to be gutted, for obvious reasons, too.
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