I had an interesting ethical/legal concern rear its head this morning and I have been contemplating it all day. I’d like to get your take on it.
I was showing one of my listings to a potential client and they informed me that in order to buy, they would have to sell their condo first. They told me the location of the condo and I mentioned that I was closing on a unit in that complex next week. Through the course of the conversation, they asked which unit I was selling and, after I told them, they told me, matter-of-factly, that the owner prior to the current owner had committed suicide in the unit. I was not aware of this fact nor had the listing agent made me aware of this. For the record, I am representing the buyer, in this case.
Mind you we are closing on Tuesday, September 28th, today is Thursday, September 23rd. Do you think I have an ethical or legal obligation to tell my buyer?
Well, the answer is that I do not have a legal obligation to tell my client, nor did the listing agent have an obligation to tell me. I have posted a link to Massachusetts General Law that specifically deals with this situation.
Ethically, however, I do feel that I have an obligation to my buyer to disclose everything I know about the property he/she is buying. As soon as I was made aware of this previously unknown fact, I called my buyer and shared my newfound knowledge. Fortunately, he/she was unaffected by the news and we are moving toward closing next Tuesday.
What would you have done if you were in my situation?
PART I ADMINISTRATION OF THE GOVERNMENT
(Chapters 1 through 182)
TITLE XV REGULATION OF TRADE
CHAPTER 93 REGULATION OF TRADE AND CERTAIN ENTERPRISES
Section 114 Real estate transactions; disclosure; psychologically impacted property
Section 114. The fact or suspicion that real property may be or is psychologically impacted shall not be deemed to be a material fact required to be disclosed in a real estate transaction. “Psychologically impacted” shall mean an impact being the result of facts or suspicions including, but not limited to, the following:
(a) that an occupant of real property is now or has been suspected to be infected with the Human Immunodeficiency Virus or with Acquired Immune Deficiency Syndrome or any other disease which reasonable medical evidence suggests to be highly unlikely to be transmitted through the occupying of a dwelling;
(b) that the real property was the site of a felony, suicide or homicide; and
(c) that the real property has been the site of an alleged parapsychological or supernatural phenomenon.
No cause of action shall arise or be maintained against a seller or lessor of real property or a real estate broker or salesman, by statute or at common law, for failure to disclose to a buyer or tenant that the real property is or was psychologically impacted.
Notwithstanding the foregoing, the provisions of this section shall not authorize a seller, lessor or real estate broker or salesman to make a misrepresentation of fact or false statement.