BROKER RISK MANAGEMENT
WEEKLY PRACTICE TIP
Online Information About Properties and Neighborhoods
Q: I am a buyer’s agent on a closed condominium sale. After COE, my buyer discovered an online blog by an owner in the HOA posting information about the HOA and the neighborhood. It alleges that there may be new construction which, in the future, might block some views, increase traffic in the area and cause disruptions and noise during construction. But the neighboring lot was just purchased by a developer and there are no plans, permits or even much publicity about what might happen. Also, this same writer alleges defects in the buildings. But nobody else, even the Board of Directors, knows anything about the alleged defects. My buyer is upset and charging that somebody should have disclosed these issues, and she is going to talk to her attorney. Apart from this blogging owner, no one else is making any of these allegations. What should I have done differently?
A: This is a growing issue in the world of the internet. Anyone can make allegations, founded or not, about anything – and often do. These assertions can be made in blogs, social media postings, tweets, or individual web pages. Such postings can be related to a particular HOA, or a specific neighborhood or subdivision. The writings may be the product of a person who has inside knowledge not yet public; or merely the rantings of a person with an axe to grind. It is often hard to differentiate.
What are the agents’ responsibilities in this area? Absent some red flag issue that would put an agent on alert as to a specific issue or online posting, it is hard to imagine that agents have a duty to scour the internet for any information, allegations, speculations or assertions that could conceivably affect the property being sold or purchased.
Yet, as you point out, buyers who discover such postings are often upset; and even more so if any of those posting later are found to have contained some portion of actual fact.
PRACTICE TIPS
1. If you become aware of an online posting that could, if true, affect the value or desirability of the property being purchased, disclose that information. As a listing agent, disclose to the buyer’s agent. As a buyer’s agent disclose to your buyer. Use the “Attribute and Disclaim” model for this disclosure.
See Weekly Practice Tips entitled “Attribute and Disclaim” and “Disclosing Unverifiable Information”
2. As a listing or buyer’s agent, give buyers a copy of the attached “Advisory to Buyers Regarding Online Information About Properties and Neighborhoods”
WEEKLY PRACTICE TIP: DO NOT FORWARD TO CLIENTS. This Weekly Practice Tip 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.
ABOUT PROPERTIES AND NEIGHBORHOODS
PROPERTY ADDRESS: ___________________________________________
As a buyer, you will receive many documents from the seller, agents and other sources. Many of these are required to be given to you by law; others are required by the purchase agreement. You are strongly urged to read, understand and approve these prior to removing your inspection contingency.
In addition, however, online information regarding the property you are buying, or the neighborhood, will also likely exist on various blogs, discussion boards, Facebook pages, etc. For example, some neighborhood associations and homeowner associations (HOA’s) have official sites; whereas other unofficial sites written by third parties may exist with postings about the community. Some of the online sites offer viewers the opportunity to express opinions and air complaints.
The information contained on those sites may consist of opinion, speculation, unfounded assertions or rumor making it difficult to determine what is factual and what is not. Neither seller nor listing agent may be aware of, nor will conduct a search for, such sites or the information on them pertaining to the property, the neighborhood or the HOA.
You are strongly advised to make an independent search of electronic media for any such online information and, prior to removing your inspection contingency, to conduct an independent investigation and assessment of any such information or comments of concern to you which you feel may impact the value, desirability or your use of the Property.
Receipt of this Advisory is acknowledged:
Buyer: ________________________________ Date: _______________
Buyer: ________________________________ Date: _______________