How much should a Realtor know about a residential survey? In New Mexico, most residential transactions include a requirement for a new "survey", usually an "Improvements Location Report" (ILR), which is less than a boundary survey but acceptable to lenders and title companies. As qualifying broker in this office, I review our closings to make sure we have adequate information in the file to meet our Real Estate Commission requirements. One of our associates recently did a deal in which the ILR showed an encroachment into a set-back required by the CC&Rs of the subdivision. The ILR did not show the limits of the setbacks, only the utility easements. When I questioned our associate broker as to whether he had advised his buyer of and the potential consequences of the encroachment, his response was that he considered it the title company's responsibility to disclose that to the buyer, and "What am I, a lawyer? How am I supposed to know this information?". He, in essence, considered it someone else's responsibility. When I suggested that he was the one to advise the buyer of such things, he was in disagreement. In discussing the situation at one of our office meetings, the general consensus was that it was the Realtor's responsibility to know of and advise on such things. Who else is the buyer to rely on? Our Code of Ethics is pretty clear about this. Article 1 (honesty), Article 2 (disclosure) and Article 11 (competence) set the standards in this area. The good news in this particular situation was that I already knew that the Homeowners' Association had previously granted a variance for this encroachment. The learning point was, however, that our associate broker did not know this.
- Location:
- New Mexico Santa Fe County
- Tags:
- wwwremaxsantafecom
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It is the obligation of every broker to know as much as possible about the property they are helping their buyer client purchase, and to disclose and discuss any and all facts and discoveries. Any agent or broker that doesn't believe this, needs to be the next drop out in our business.
Here's a quick true story that happened to me over 15 years ago:
a friend/client that I had sold a house to several years before this current contact, wanted to sell the house I had helped him buy, and wanted vacant land so he could build his next home to his plans.
We found a piece of vacant land that he liked. There was a survey. We took the survey to the land and we both agreed that it looked fine. We called the Listing agent to ask that he walk the property with us, using the survey as our guide. The listing agent swore that the parcel we were walking was the correct property. My buyer bought the land and closed on it.
One day thereafter, he was on the land cutting down some trees when an old man came up and asked him what he was doing cutting trees off of HIS land. My buyer explained he had just bought it and the old man said,"You didn't buy this piece, you bought the piece next to this parcel".
It turned out the listing agent had given us the wrong survey. Luckily for that agent and his broker, my buyer was ok with the piece of alternate land he was told he purchased or there would have been a lawsuit for sure, and we all would have suffered.
We are held to higher standards than some don't want to practice, but we should all strive to be the kind of agent/broker that our clients look up to and respect for our due diligence on their behalf.
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Don,
We had a situation some 20 years ago in which the builder built on the adjacent property. Now, how would you like to know that you have a new house on your lot for which you did not have to pay a dime?! I do not know what it took to settle that, but the house was eventually sold so some kind of a compromise was made between the builder and the lot owner.
Mary,
I wonder if, in this situation, E & O would have taken the case as it could have been assessed by them as negligence on the part of our associate broker. I don't know if you have even been involved in a case in which the E & O carrier is involved, but their first response is to find a way to absolve themselves from coverage.
Thanks for the comment.