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Big legal risk to agents - Read my blog just before this one

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Education & Training with Real Estate Expert Witness Support

Just had an agent comment on my prior blog:   AGENT BEWARE!

She had attended a class where the instructor raised the same issue I had.  But,  his suggestions was for the agent to go to the govenmental agency and put together a package of permits for the buyer:  NO. NO & NO AGAIN.

Several problems with this approach:

  1. You many not get all the permits.  Cities are notorious for being sloppy and in most jurisidictions,  have governmental immunity, meaning they can't be sued for negligence
  2. Permits are complicated.  If you are adding a master bedroom,  it is not common to have one permits but there will be seperate signoffs for foundation, structural/framing,  electrical, plumbing,  roof, etc, etc.  So, you can see where this could lead.
  3. Once you have the permits,  it probably imposes a duty on you to now audit the list.  Meaning,  you have to walk around the house and see what MIGHT be improved or not original e.g.  new roof, deck, pool, kitchen,  remoded basement, etc, etc. 
  4. If you speak to someone in planning and pass on what they say,  you may be liable if that information if faulty
  5. Very common that permits are taken out but there is no final inspeciton by the city or county.  Contractors are notorious for this because once the job is done,   they don't want to wait to get paid.
  6. Permits are confusing.  Most clients and agents can not read them, so what have you accomplished by giving them the permits>   It is better than not giving them to them but places additional burden on the buyers agent to give them good advice

Another agent commented that they don't have this problem. Well,  I hope you are right.  But,  that doesn't forgive the Buyer's agent from the duty to point out that non-permitted improvements can be a nightmare.

 

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Guy Berry

Email - guy@guyberry.com

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Jen Bowman
Keller Williams on the Water - Holmes Beach, FL
Realtor - Anna Maria Island & Bradenton FL

I had an elderly buyer client ask me to go pick up her CO (certificate of occupancy) after she had major renovations done to the house she had just purchased. So, I went to do that for her because she doesn't get around easily.  In order to pick it up, I was asked to sign off that the builder had disposed of trash properly and other things I can't remember.  I was nervous about that because I don't know how things were disposed of.  I wasn't there to see it.  The builder should have picked up the CO.  I asked the clerk at the county office about that, and she said she wouldn't sign it. I could be held legally liable if the builder did something wrong.  I called my client back and told her that I attempted to do it, but couldn't take on that liability.  She understood and finally hounded the builder to finish the job he started.

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Sep 25, 2008 02:57 AM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Good Grief.  Does that instructor have no knowledge of risk???

Anytime I see a homeowner improvement, be it a deck, addition, finished garage, finished basement where plumbing and especially electrical has been done, I ask about permites.  No permits, no contract. 

I have never lost a buyer because of this practice.

 

Sep 25, 2008 02:57 AM
Rob & Jeannie Steward - Realtors®
RE/MAX Advantage - Nashville, TN
We Work TWICE As Hard For You! - Ashton Group

Great points Guy. We always enter every situation representing the buyers best interest as if it were our own. That's what we get paid for. Do we tell everyone to read and understand the paperwork? Yes but not only that, we explain it to them, meaning we have to read it as if we have never seen it before. How novel.

Many situations come with options. Pros & Cons! Each situation is unique. Get that facts.

Sep 25, 2008 03:00 AM
Hope Goss
Ventura Property Shoppe - Ventura, CA
Ventura Real Estate

Thanks for explain they why's on this subject.  We often get direction on what we should and shouldn't do, but they usually leave out why!

Sep 25, 2008 03:07 AM