A little birdie just informed me that a couple of large California brokerages have been dinged for not providing reports/disclosures to perspective buyers from a previous transaction on that same property that the broker was involved in!
What this means is if your brokerage represented the seller on a transaction that closed 5 years ago, for example, and you now list it with the new owners and subsequently receive an offer on it, you must now provide ALL disclosures and reports to the buyer from the previous transaction as well as new/updated disclosures/reports.
Talk about a can of worms! How many of us destroy closed files after 3 years per DRE rules?
What do we do if the files have been destroyed? How long should we keep the files now under the new obligation-forever? Do we have systems in place to track our involvement in a previous transaction with that property?
What if the seller does not want the brokerage to disclose previous reports issued prior to a house being completely remodeled for fear of scaring the buyer away? Will they then list with another brokerage who does not have access to the information?
I am all for disclosure and don't mind perspective buyers seeing history on a property. But trying to follow this rule and enforce it (IF the file has not been destroyed, IF the company can even locate the file and disclosures) is going to be a challenge.
Some real estate companies have already incorporated a new disclosure notifying the seller at the time of listing of the agent's obligation to disclose previous disclosures/reports and another disclosure to the buyer explaining these documents are for historical disclosure only and may not be complete nor accurate as to the condition of the property today.
Sheesh, I see another huge round of paperwork that we will now have to track.
Comments(1)