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Residential Real Estate

October 3, 2018

Property Disclosure and Liability

Property Disclosure and Liability - Material Facts and Agent Duties

Duty to Disclose?

Is a real estate broker, who is employed by the seller or buyer, under a duty to disclose? (Could be variations from one state or provincial jurisdiction to another).

"Facts materially affecting the value of the property" known to the agent.

Facts the agent should know based on standards of practice in their locale

Facts that could have been determined by a reasonable and diligent inspection of the property by the agent?

Must agents, in the sale of residential real estate, identify any red flags?


The Landmark Case - Easton Vs Strassburger (1984), greatly expanded agent and broker liability and placed new disclosure requirements upon licensees involved in residential sales. Licensees were now liable for not only what they knew about a property, but also what they "should have known."

As a result of the Easton Case, California real estate licensees must conduct a "reasonably competent and diligent inspection of properties sold," and fill out the disclosure form.

Possible Short List of Red Flags

Stains and discoloration on ceilings and walls

Unusual odors

Bowing foundation walls

Grading sloping toward the house

Multiple layers of roofing; dirty or missing gutters

Push button light switches/knob and tube wiring/no GFCI

BUGS (or evidence of them) in the house (I'm bug-phobic!)

Uneven settling - walls or floors

Peeling paint

Cracked slab

Additions added on illegally

Front yard issues, culverts or utility boxes that affect the value

Front, side or rear set back issues

Can you think of any other red flags?

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