Q: I recently took a listing of an older home that has not been well maintained. The Sellers, (who have very little equity and will not be netting much at close of escrow), do not want to spend any money to correct code violations or make any repairs. They cannot afford to reimburse me if I try to help. There are multiple defects which could cause someone to trip and fall. I also suspect that they may not have adequate insurance coverage. There are a couple of separate Advisories in our branch office relating to protecting personal property and the risks of having people take off their shoes to view the interior of a home but these do not address my concerns.
What is the best way for me to warn Sellers about their risks including those from defects and other hazards? What is the best advice for me as the Listing Agent?
This is a timely question since we are seeing an increase in personal injury claims (including wrongful death) pursued against Sellers and Listing Agents that occur at brokers’ tours, open houses and even during inspections. When Sellers are sued, they often blame their Listing Agent for not properly protecting the Sellers’ interests and/or for failing to take reasonable corrective action to prevent the injury and/or they claim that they were not properly advised on what steps they needed to meet their obligation to protect their own interests (which is specified in most Listing Agreements).
In addition to the breach of fiduciary duty claims raised by Sellers, the injured parties usually file a direct claim against the Listing Agent for not take reasonable steps to correct the problems and/or to properly prevent injuries by using appropriate warning signs.
It is not always easy to tell Sellers about the negative aspects of their property, especially those factors which relate to health and safety issues that not only devalue the property but create potential hazards for anyone visiting the property. The best method is to provide Sellers with a comprehensive Advisory to warn about their potential risks and to document that you have made good recommendations to the Sellers such as what steps they can take to minimize their risks.
Some brokers currently use single issue (or stand-alone) advisories on various topics. Attached is a single, comprehensive Advisory to document that Sellers have been warned about the need for Sellers to conduct their own Property Hazard Assessment and to recognize that pools and spas are not the only water features that pose a risk to small children. The attached SELLER ADVISORY REGARDING SAFETY DURING MARKETING OF PROPERTY also eliminates the need for separate warnings about “shoes off” requirements, protecting personal property and valuables (including artwork, medication, firearms and personal/financial information), making reasonable accommodations for people with disabilities and the need for insurance coverage.
PRACTICE TIPS:
- The best practice for Listing Agents is to provide the SELLER ADVISORY REGARDING SAFETY DURING MARKETING OF PROPERTY at the time you take the Listing.
- Listing Agents should recommend that Sellers obtain advice as to how best to assess potential hazards and how to prevent injuries.
- Every time that the Property is to be show or inspected, Listing Agents should check for danger signs. Do not assume that the Property has remained in the same condition.
- To the extent that hazards exist which cannot be corrected (unsafe steps or access ladders), the best practice is to post large, easily-understandable warning signs and, as much as possible, prevent anyone from having access to unsafe areas.
- Do not assume that any type of oral warning as people come onto the Property is sufficient. Such warnings are often difficult (if not impossible to prove) and if there are multiple visitors who visit the Property more than once, the likelihood that the oral warning was given every time is unlikely.
- If there are multiple hazards, consider not having a lock box and have all access controlled by appointment only. In these situations, photographs of the hazards should be reviewed by the broker with risk management counsel to assess what additional steps may be necessary.
This Weekly Practice Tip is an attorney-client privileged document for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.
© Copyright Broker Risk Management 2018 10/19/18
SEE ADVISORY BELOW
_______________________________________________________________________________________________________________________________________________________________
(Insert Broker Name)
SELLER ADVISORY REGARDING SAFETY DURING MARKETING OF PROPERTY
Property Address: ____________________________________________________________________________
While your Property is being marketed for sale, potential buyers, real estate licensees, inspectors and other people (collectively “Invitees”) will have access to that Property. You should make every effort to ensure that your Property is safe for all Invitees by not having any hazards that might cause injury to others, and you need to take reasonable precautions to protect your personal property so that it will not be damaged, lost or stolen.
PROPERTY HAZARD ASSESSMENT: Broker recommends that you make a careful assessment of your Property to determine if there are any aspects of that Property that might cause an Invitee to slip, trip or fall (including but not limited to ponding surface water, weak or rotted wooden decks, stairs or ladders, railings and loose carpeting). To the extent that any hazards exist, these hazards should be fully disclosed to Broker before anyone can access the Property and then you should either correct the hazards or take appropriate measures to warn all Invitees to avoid that hazard.
POOLS AND SPAS: Swimming pools, spas, and hot tubs should have at least 2 safety features designed to prevent small children from drowning as required by state law; however, other water features that may run through or abut the Property, such as streams, culverts, canals, ponds and even fountains could also pose a danger and appropriate safety precautions should be taken to protect all Invitees.
“SHOES OFF” REQUIREMENT: Some property owners request that Invitees remove their shoes upon entry and conduct their visits in stocking feet and/or with the use of disposable shoe coverings. Broker may only make that request of Invitees, but cannot force anyone to remove their shoes. There is an increased possibility of a slip and fall and/or some other form of personal injury incident if Invitees are required to be in their stocking feet and/or use disposable shoe coverings; this is especially hazardous when there are hardwood, stone and other hard flooring surfaces. Broker does not recommend any type of “shoes off” requirements. You are strongly encouraged to consult with your own insurance and legal advisors regarding the risks and liabilities that may occur with any type of “shoes off” requirement.
PERSONS WITH DISABILITIES: Some Invitees may have disabilities and are legally entitled to have reasonable accommodations made to enable these Invitees to have equal access to the Property. These individuals will not be required to remove their shoes and/or to cease using any mobility aids, including but not limited to braces, crutches and wheelchairs. Broker cannot prevent any Invitee from bringing their service or comfort animal into the premises.
PERSONAL PROPERTY AND VALUABLES: Jewelry and other valuables should be placed in your own safe deposit box while the Property is for sale. Larger items that can be damaged or stolen, such as vases, statues, other artwork and firearms, should be stored elsewhere. If you choose to keep any of your valuables on the premises, it is strongly recommended that they be kept under lock and key so that only you will have access. You should safeguard any and all medications. Care should also be taken to limit access to personal and financial records, computer equipment and software to avoid identity theft.
INSURANCE: Broker recommends that you consult with your insurance broker to be sure that your insurance coverage is adequate during the listing and escrow period for any losses which may occur including, but not limited to, personal injury, property damage and theft. Your current insurance policy may not provide proper or adequate coverage, especially if the Property is vacant.
Broker will endeavor to make the sale of your Property as convenient as possible for you; however, we so not have the requisite knowledge and expertise to ascertain all potential hazards and recommend that you retain an appropriate expert to make that assessment and provide recommendations to minimize your risks. Broker is not responsible for your personal property or your insurance coverage and thus you need to take all necessary steps to protect yourself.
Date: _____________ ______________________________ __________________________________
Seller Seller
DO NOT FORWARD TO SELLERS OR BUYERS. This Weekly Practice Tip is for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.
Copyright© Broker Risk Management 2018 10/19/18