Real Estate Brokers
ENTER THIS HOUSE AT YOUR OWN PERIL
Duty to Warn of Risks
A recent state Court of
Appeal case has clarified a listing broker’s responsibility. In the case of
Hall v. Aurora Loan Services, LLC, 2013 DJDAR 5460 (April 16, 2013), the court
ruled that a jury can potentially hold the broker liable for negligence where
the broker did not warn all persons about conditions in a listing property. In
this situation there was a home inspection report which mentioned an attic
ladder as being potentially dangerous. Home inspection reports typically list
one hundred suggested repairs. The report did not spell out how or why, but
image a fold down wooden ladder that opens from the ceiling and allows access
to a finished attic. The ladder appeared sturdier than a tree fort ladder but
proved to be unstable.
This particular case was
filed by Real Estate agent Hall who when showing the property to potential
buyers opened the ladder drop down. She proceeded to climb the stairs and a
hinge gave way. The snapped hinge caused her to fall and break her leg. Hall
sued the listing broker, the lender (as the property was a foreclosure where
the owner of record was a bank), and just about everyone involved. She has
prevailed on appeal.
In the past, when a
property is an REO (real estate owned foreclosure) there were contracts that
spelled out in legalese that the seller (often a bank or servicing agent) is in
no way responsible for the condition of the property. Since the mortgage bank
never resided in the home, they have little knowledge of the condition or
maintenance of subject. Buyer beware, is the flag they once flew. This case
however seems to overturn the responsibility to listing broker and sellers that
a waiver of rights is not enforceable. A listing broker will be held to a
higher standard of knowledge and due diligence to advise anyone who not only
buys the property, but anyone who walks past the curb.
For example, a broker
will have to post a list of possible health and safety hazards to open a
property for broker preview or for other agents to access through lock box. Will
posting on your entry door: Enter at your own peril be enough to advise the
visitors? Probably not, as someone who is blind will claim the disclosure was
not properly read to them. Anyone can sue over anything.
No language in the
listing agreement will relieve the broker of responsibility on health and
safety. Will every realtor who borrows the “feed” – uses the photographs and
listing information also be held responsible? I think yes. The far reaching
concept of this case is to spread any potential liability across all real
estate agents and Realtors.
The buyer's agents may
also have responsibility for incidents where parties are hurt or killed while
viewing property listed for sale. I can see my beautiful friend Hillary Caston
in her Lexus folding down the visor of the passenger seat.
“You want me to check my
lipstick in the mirror?” Her buyer in front seat asks.
“No I need you to sign
this agreement that if you trip and fall in this house you won’t sue.”
