Ok, I’ll admit that is probably not the most positive title in the world, but it does sum up some of the areas of real estate property disclosure law that seem to cause the most confusion.
This is part 2 of a three part series inspired by an article I read about an Oregon family who unknowingly purchased a foreclosure property that had previously been used as a meth lab. Could this happen in Maine? Would you as the buyer have any recourse?
Yes. And yes.
Anything CAN happen, however we do have rules and regulations in Maine designed to protect home buyers...and sellers for that matter, from unwanted and unnecessary problems and the lawsuits they tend to spawn.
Whether you sell your home with a real estate agent or not, there are 6 things you must disclose to buyers when selling your home in Maine (part 1 of the series.) When real estate agents are involved in the transaction, there are more rules and protections in place. Buyer agents in Maine have more responsibility for disclosures to their clients than listing agents. Many buyers and sellers may not fully understand the ins and outs of what Maine real estate agents can, cannot, and in some cases must tell potential buyers.
The disclosure differences between a listing agent and a buyer agent:
A Maine listing agent must disclose and all items required by law and any additional items their seller client has directed them to disclose. The listing agent is required to be honest, but if a buyer asks a question regarding an item not required by law that the seller has not given them permission to disclose, he/she cannot answer the question. They cannot lie about it, but the honest answer to those questions may simply be “I am not authorized to tell you that.”
The requirements for a buyer agent in the state of Maine go above and beyond those of the listing agent. A buyer agent must disclose anything they know or “should have known” about the property to their buyer client. This is why it is so important to use the services of a competent and trusted buyer agent when purchasing a home. This requirement includes more than simply the material facts of the property.
So what falls into the “should have known” category? Quite a lot actually. A buyer agent “should have known” anything that is included in the property file at the town office, since it is available for them to review. A buyer agent “should have known” that the home was built in a flood zone since they have access to that information. Certainly they “should have known” that those water marks all the way around the basement about a foot off the floor could mean that the basement has flooded (in which case they would recommend their buyer client consult with a building inspector.) Buyer agents are not professional inspectors, but there are certain items that should send up red flags, especially when they indicate that the seller may not have been completely honest with their property disclosures.
Experienced buyer agents who receive a seller property disclosure that is incomplete contact the listing agent to get answers to any items left blank by the seller. They review the property file, tax records, and any code compliance records at the town office. They google the property address to see if any public records, police files, or other items pop up. They do a preliminary search of the registry of deeds to see if there are any liens on the property. They also keep up on any local news regarding current issues and/or development plans. All of this information is then provided to their buyer clients so that they can make the best decisions possible.
There are no guarantees in the “should have known” category. However, Maine real estate agents representing buyers are expected to show due diligence and provide as much information as possible to their clients.
What about those hauntings, deaths, and meth labs?
A home seller in Maine does not have to disclose items such as a death in the home, a home believed to be haunted, the known felon living next door, or the state’s plans to put a highway through right next to the property. Some states have disclosure laws for these “stigmatized property” items, but Maine does not. In fact, a listing agent cannot disclose these items unless he/she has the written permission of the seller. However, it could be argued that a local buyer agent “should have known” these little tidbits of information and informed his/her buyer client. Maine buyer agents must do more research to show due diligence in gathering information for their clients. The “should have known” category often gets decided in a court of law, but savvy buyer agents have learned to do a thorough investigation of the property to protect their clients and themselves.
To see the list of disclosure items required in the state of Maine, please read part 1 of the series: To Tell Or Not To Tell? 6 Things All Maine Home Sellers Must Disclose.
Does this mean a home buyer should just rely on the information their agent gives them? No way! Read about the 5 Things A Home Buyer Can Do To Ensure A Happily Ever After in part 3 of the series tomorrow.