I recently found myself showing a property on the Palos Verdes Peninsula, rising in its natural beauty and grandeur above the densely populated beach cities below. The Peninsula is home to four cities, primarily made up of single family homes. Ranging from modest California ranch style home to palatial estates in gated communities or along the bluffs overlooking the Pacific.
One of the many attractive aspects of owning property in Palos Verdes Estates, Rolling Hills, Rolling Hills Estates, or Rancho Palos Verdes, the latter being the largest of the four cities, is the lot size of the homes are much larger than those found down at the beach where, naturally, the developers try to build as many homes as possible. Beach homes and their smaller lots appeal to those who are of the mind that the beach IS their yard, and as long as they can walk to the sand, a 1,350 square foot lot is more than enough room.
I was explaining this to my client as one of the advantages to living on "the Hill," along with the distinguished public school system, quality of life, the many activities including golf, equestrian trails, hiking, biking, whale watching and so much more.
My client was overjoyed to find a property that not only matched almost everything on her wish list with regard to the type of home, it's size and amenities, but she seemed equally delighted at the prospect of owning nearly half an acre of ocean view land on the prestigious Peninsula. She looked at me, pen in hand, and exclaimed "I never thought I would find such a beautiful home and have this much land to call my own. My children will simply love this yard! And that trail down at the base of the property... where does that go?"
The moment I was dreading had arrived.
I started walking toward the lot line, my client slowly following a few steps behind, taking in the view of the downtown L.A. skyline, the Hollywood sign, and the coastline stretching up to Malibu and beyond. "You need to know," I slowly advised, "there's a chance part of the lot, should you proceed with the purchase, may not actually be yours."
She looked at me with an expression that was somewhere between confused and shocked, and asked "What, exactly, are you trying to tell me? Is there any information in the listing description?"
I launched into a speech I've made so many times I'm fairly certain I could recite it in my sleep. "In some cases," I said, "the City owns a part of your property, especially in a case like this where there's a "trail," adjacent to the lot." The trail, as she called it, was, in fact, a fire access road. I went on to explain that, while not always the case, there may be a city "easement," that could reduce the actual size of the amount of land she would own, should she decide to purchase the home.
Of course, she wanted me to elaborate right there on the spot. And, I did - to a point. Could I stand there and unequivocally address whether or not there was a city easement? Yes, because I had called the city prior to showing. Could I safely advise my client of this information?
As a real estate professional, my job is to provide service and information, but there's a fine line that must be observed to avoid potential liability. Please keep in mind when I say potential liability, I'm not only trying to protect myself, I'm protecting my client. Just as the listing agent was protecting his client when, in the listing description, he advised to "check with City for any restrictions."
We had been working with one another for over four months, and had a great rapport. She knew I wasn't trying to dodge her question or responsibility when she heard me say what has become a mantra in my professional life: "When in doubt, check with the City." In this particular case, because the property she was interested in was sloped well above the fire road, no easement had been recorded by the City.
Due diligence is not only an agent's responsibility. Never take anything for granted - become a part time detective while house hunting. Yes, your agent is there to protect you and act as your fiduciary, disclosure being a key part of those obligations. But there are legal limitations and it is incumbent upon you, the client, to perform your own due diligence as well. After all, this is one, if not the, biggest purchase you'll ever make. ~Disclaimer: Laws vary from state to state. When in doubt, contact a local real estate attorney.