Realtors: You Must Independently Verify Property Information
In DeWolfe v. Hingham Centre Ltd. (embedded below), the Massachusetts Appeals Court recently considered a Realtor’s duty to disclose and independently verify zoning information about a listing property. The agent, relying on what turned out to be erroneous information supplied by his client, listed a Norwell property on Multiple Listing Service (MLS) and newspaper advertising as “zoned Business B.” The property was not in fact zoned for business use; it was zoned residential, thereby prohibiting the hair salon the buyer wanted to open at the property.
Despite the general disclaimer on the MLS system and in the purchase and sale agreement, the Court held that the Realtor could be held liable for misrepresentation and Chapter 93A violations due to providing this erroneous information.
The lesson to be learned for agents here is:
- Never trust your client. I hate to say this, but when it comes to disclosures, it’s true.
- Always independently verify information about the property from available public sources. Here, the agent could have simply gone down to the town planning office to verify whether the property was zoned commercial or residential. (The buyer or his attorney could have done so as well—this was a complete failure on all sides).
- When it comes to zoning, which can be complex and variable, think twice before making blanket statements. Better to be 100% sure before going on record about whether certain uses are permissible. You can always get a zoning opinion from a local attorney.
Richard D. Vetstein, Esq. is an experienced real estate attorney who often advises real estate agents on their duties and ethical obligations. Please contact him if you need legal assistance regarding a Massachusetts residential or commercial real estate transaction.