Misrepresentation? What should I do?

[Frank Z.]

Hi, 

I am my own real estate agent and I recently got a property under contract. The description the selling agent added on the MLS said the property was rentable via Airbnb. When I asked for the bi-laws he dragged his feet. I had to do a bunch of work to get the HOA bilaws on my end, the manager of the HOA has a phone that has been disconnected, turned out the treasurer was running things for the most part and she provided bi laws after the discovery window (though these were requested within the window).

I was paying a premium because the listing was advertised as AirBnB friendly, now the property does not make sense at that price and they are not open to renegotiate. I explained to the selling agent that had they not advertised it as such, or been more helpful during discovery we wouldn't be in this situation. 

The selling agent says because the GAR (my MLS board) states in the contract that: "

Section B. Paragraph 10. c. "Disclaimer: Buyer and Seller have not relied upon any advice or representations of Brokers other than what is included in this Agreement. 

He is totally absolved of the fact that he described the property incorrectly. Is that true? My inclination is to take him to small claims court the $2,000 deposit plus the $535 appraisal fee. 

Any advice would be greatly appreciated!

[Matthew Nicklin]

That is a tough spot. I am not a an attorney, so consult one if you wish this is just my advise. My first thought is you should have extended your due diligence period if you didn't have all the information you needed to make a decision by the end of your due diligence time period. You could have also put in a special stipulation stating your offer was subject to no rental restrictions or more importantly no short term rental restrictions. I have seen a few condos that do not have "rental restrictions" but if you read their declarations it says no restrictions on leases that are more than 30 days, meaning they have a restriction and a right to enforce and prevent short term rentals(AirBnB). This is why I stress to my clients that are interested in townhomes/condos that they need to review all HOA information within the due diligence time period. This includes declarations, covenants, bi-laws, and most importantly financials.

As it sounds like this was not done durning your offer process and you actually terminated after your due diligence period the seller is probably entitled to some liquidated damages. So I would see if they would be willing to give you some money back but in the end you may have to chalk the whole thing up to a learning experience. Tuition to the school of hard knocks is expense, you didn't know now you know. $2,535 is an expensive lesson but maybe it will save you from making the same mistake on a bigger deal.