How can the Buyer Sue the Seller and the Realtor 4 YEARS LATER?

Question

Check out this article in our area where a home owner (1st time buyer) is suing the listing realtor, buying realtor and the seller- 4 YEARS after she bought the house. This Norfolk Judge is claiming some "Brokers" Act case law. How can this be? Has this happened elsewhere???.....

Mark Gallagher · Answer

There are always 3 sides to a story...Seems odd that an agent would ask another agent about flood insurance.. any mortgage lender would do a FEMA search, and furthermore I wouldn't ask an agent about flood insurance. I would search the flood maps myself, or contact the lender. $75,000 request in repairs = ridiculous$350,000 request in punitive damages = attorney needs a new Mercedes

Mark Gallagher · Answer

@Kris Haskins1) You always act ethical and in good faith2) You screen the buyers and sellers you are working withIt's that simple. I'm coming up on 1,000 houses sold, and have never even come close to any sort of complaint (knock on wood!). The only complaint ever was someone filed a BBB against me because the contractor that installed the final lock change on an REO didn't flip the lock face around. So you had to switch the key around to open the deadbolt vs. the bottom lock. Seriously, someone complained about that, and I had nothing to do with it.

Karyn T. · Answer

Unless the seller and agent have VERY poor lawyers, this case "should" go nowhere. The key to disclosure is whether you KNEW about it. If previous owner did not do the work, and never had problems, then they sold the house in good faith and the buyer should be going after her INSPECTOR, if she bothered to get one. It looks like they were military which means likely VA loan which will insist on inspection. Even the inspector may be fine though, since they are only liable for "reasonably accessible" spaces. If the damage was behind walls and siding, it's unfortunate, but the buyer is at fault. However, it looks like the seller / agent promoted the house with a "newly refinished" basement....if the seller had that work done, it should be easily provable, and shame on them. They'll get what's coming, legally.She bought in an old Norfolk neighborhood, the whole of which is within walking distance to the Atlantic Ocean. Norfolk gets hurricanes pretty often....and the entire area is surrounded by river deltas dumping into the Chesapeake Bay. She could have had flooding the first year (Hurricane Irene came through in 2011....ask me how I know...) she lived there and didn't fix it herself. I dunno. I smell a fish....

Kris Haskins · Answer

How do we protect ourselves from a seller coming back and accusing us of damage which we really didn't know about?

Fred Heller · Answer

Not an attorney but here in Texas the statute of limitations for filing a lawsuit against another is 4 years, with a few exceptions. I'm sure other states have similar statutes of limitations.

Michaela G. · Answer

@Mark Gallagher , I"m not saying that agents are supposed to know it all. I'm saying that a first time home-buyer assumes the agent to know everything or be able to answer the questions or know where to go to get the answers or tell the buyer that they don't know. And obviously the question was asked. I assume that the buyer actually has to sue both of the agents, because she didn't have any direct dealings with the seller. Questions and answers came through both of the agents. To show the chain of wrong information given, when explicitly asked, through her buyer's agent to the listing agent and answer given of 'that'll never happen' she has to include the 2 agents, who in turn can then sue the seller for hiding a known defect, if proven so.

Mark Gallagher · Answer

@Michaela G.If someone in the scenario was hiding defects with complete knowledge, they're wrong without a doubt.That being said, just because I'm an agent doesn't mean I know everything. In fact, most agents don't know the first thing about construction. So if the general public is relying on real estate agents to be construction experts, we're in a heap of trouble. An agent knows the laws, financing, etc. An agent does not discover material defects. If this buyer had a home inspection, and obtained a loan with a FEMA cert - what else could you expect an agent to do? It would be magic for an agent to have more knowledge of a property than a) a home inspector and b) FEMA!

Michaela G. · Answer

But this was a first time home buyer. They usually don't have the experience, that you as an investor might have. They have an agent to hold their hand and make sure to ask the right questions and get the answers. First time buyers don't know what they don't know. That's what the agent is supposed to be there for.

Edward B. · Answer

You can always be sued. VA law is pretty clear in terms of disclosure. If any of these agents were aware of the defects they would be required to disclose it. Proving they were aware may be the hard part. In the case of the listing agent she can also argue that even if they weren't aware, they should have been and may have a case there. I would think that the best case would be against the seller, then the listing agent, and finally the buyers agent. Kind of a moot point though, once you are sued, you have already lost something. No idea what the statute of limitations, if any, may be in a case like this.

Charlie Fitzgerald · Answer

Yep...happening more and more...