Can real estate agents lie?

January 10, 2007 6:08 AM

Can real estate agents lie?

Here's the story: last fall my cousin Robert bought a condo in the Columbia Heights area of Washington DC. His first real estate purchase. When he was looking, the real estate agent said - in person and in emails - that the condo association fee (which at around $350 is relatively high for the condition of the building and services) includes all utilities in the unit, including electricity. So he buys it and discovers, of course, that the association covers water for the units and electricity in the common areas, but he is responsible for the electricity in his unit, to the tune of around $100-150/month. Apparently the MLS listing was accurate, but the agent "misinterpreted" what it meant.

Being fairly easygoing, cousin Robert is willing to let this slide, though he acknowledges that if he had known the electrical was not included, he probably would have bought something else, or at lease made a lower initial offer.

But it just seems wrong to me. Accepting all the IANAL disclaimers, what are the rules on this? Is it pure buyer beware? Do real estate agents have a legal obligation to tell the truth? The agent made at least a couple of grand on the transaction; surely that brings some responsibilities aside from doing a simple database search and opening doors. Can agents be sued if they intentionally or through negligence convey false information? Are they covered by some kind of malpractice insurance?

posted by RandlePatrickMcMurphy to work & money (12 comments total)

Realtors lie all the time. What's unusual in your story is that the realtor lied in writing. I would say your cousin has grounds for a formal complaint. Whether a suit would prevail - a lawyer could answer better.
posted by Kirth Gerson at 6:25 AM on January 10, 2007

Real estate agents have an obligation to tell the truth as they know it. I think you'd have to prove that the real estate agent knowingly lied, didn't just misinterpret something.

Didn't Robert read through the condo association covenants before buying the condo? They're legally required to be made available to him before purchase, they outline all this bill allocation stuff, and the "how to buy a home" books I've read all make a big point about it being in the buyer's best interest to read this stuff. If he didn't read the documents available to him until after the sale closed, that's his fault, not the real estate agent's.
posted by croutonsupafreak at 6:51 AM on January 10, 2007

I'm sure there are some legal things he can do and can bring him to the DC real estate board. I personally would threaten him with that as well as saying he'll post his experience on the local websites like:
Yahoo Group
DCGentrification.com
Columbia Heights News

If this agent sells in the neighborhood often then that would probably scare him. I own in Columbia Heights and could recommend a good agent to him if he needs it later but I doubt he can get out of the sale now. I am not an agent myself.

And yeah, that is really high. I pay $185 for my condo fees. I also think he needs a goal in mind when talking to the agent. I'd suggest asking for the agent's commission as a settlement.
posted by hokie409 at 6:54 AM on January 10, 2007

At a minimum he should lodge a complaint with the local real estate board. I don't know what enforcement is like in DC but here they can pull his license if it's found he acted unethically.
posted by Mitheral at 6:56 AM on January 10, 2007

I've had experiences with real estate agents who lied, and with others who misled without telling blatant lies, and with others who were honestly misinformed or so ditzy that they didn't realize that they provided bad information.

Unless you have something in writing from the agent that says something contrary to the truth, I'm not sure how you would prove an intentional falsehood. DC law and the procedures of the DC board of realtors (or whatever they call it there) would govern this.

You might inquire with the board of realtors about this, without naming names or providing identifying information about the parties. That would provide more information for you w/o the expense of hiring a lawyer.
posted by Robert Angelo at 7:20 AM on January 10, 2007

As a previous commenter said, "Didn't Robert read through the condo association covenants before buying the condo?"

He had two ways to get information about what he was buying:

a) listening to the realtor's offhanded assurances
b) reading the documents

He chose a). It didn't work out for him. Next time he should choose b).
posted by jellicle at 7:40 AM on January 10, 2007

Yeah, I can't imagine taking a real estate agent's word about anything that involved long-term costs. Buyer beware. (I mean, I'd report the bastard, I'm not excusing him, but by the time you're buying houses you should have learned to check things for yourself.)
posted by languagehat at 8:24 AM on January 10, 2007

As a Realtor in Minnesota, condos and townhomes have a special rule about the association documents being provided upon offer and you can cancel your offer if you found something you didn't like.

In my opinion the Realtor didn't lie on purpose, but should have advised "here's the docs, you or a lawyer should go through them to make sure you are ok with everything in it".
posted by thilmony at 8:41 AM on January 10, 2007

Call his broker in charge first, then go to your local real estate board.
posted by konolia at 9:20 AM on January 10, 2007

And yes indeed, they can be sued. And their brokerage can be sued.
posted by konolia at 9:21 AM on January 10, 2007

I could tell you horror stories, involving multiple occasions, I wont bore you. Realtors will do anything to get a commission. There are a few good ones out there, but not many and hard to find. My wife was a realtor for a while, she bailed out, she had a serious condition that kept her from making it in realty sales, she has a conscience. (Do I sound jaded? you betcha) Yes, they can be sued, but you will be up against a team of corporate lawyers, it wont be between you and the realtor in question.
posted by BillsR100 at 9:55 AM on January 10, 2007

This isn't a direct answer to your question, but I would try talking with the real estate agent about getting a refund of some portion of his commission due to his error. The agent has to put some value on having a satisfied client (or at least on having a client who isn't actively telling others about what an awful agent he is). Whether that's a token couple hundred hundred dollars or even a year or two worth of electricity bills is something your cousin and the agent will have to work out. I don't think there's much likelihood of a legal or administrative remedy (and even if they existed for cases like this, the costs in time and money would almost certainly outweigh what you'd win), but as a businessman the agent might want to fix things.
posted by jaysus chris at 10:54 AM on January 10, 2007