Q: I am taking a new listing. When the Seller bought the home, she was told it had 5 bedrooms and 3 baths.
I checked the MLS records and the prior Listing Agent had inputted that it was a 5/3. My Seller wanted me to market the home the same way but one of the “bedrooms” does not have a closet. It is also clear there had been a garage conversion. A “bedroom suite” is located at the end of a driveway and there is no garage. The Seller did not know if the garage conversion had been done with permits; she did not have any of the disclosures from when she purchased the Property and I was not involved in that prior sale.
Because of our uncertainty, I checked the city’s online building department records; the city’s records show the Property only has 3 bedrooms and 2 baths. They had no record of any permit requests to make changes to the Property including, but not limited to, the garage conversion.
Even though we believe that the garage conversion was done without permits, the Seller still wants me to list the home as a 5/3 because she believes what she was told when she bought the Property and she has been using it as a 5-bedroom, 3-bath house for quite some time. Naturally I would need to make a disclosure about the garage conversion but what can I legitimately put in my advertisement? How should I disclose this discrepancy in the total number of bedrooms and baths?
A: Unfortunately for this Seller, simply because she bought the Property believing that the advertised number of bedrooms and bathrooms was accurate, she cannot use either the prior advertising nor her historical use of the Property as an excuse for knowingly advertising false information about her home when she sells it.
I. Varying Definitions for What Constitutes a “Bedroom”
The California Building Code establishes minimum room widths, total area and ceiling heights for bedrooms as well as minimum window size and the means of egress. The California Code has been adopted by virtually all cities and counties, but many municipalities have chosen to change the definition of a bedroom when creating their own building codes. Sometimes the state requirements are expanded; other times they are relaxed.
Although most cities require the existence of a closet in a room to be classified as a legal bedroom, many others do not. Most jurisdictions will not allow a room which is the only access to another room, to be deemed a legal bedroom. Still other rules may apply and thus it is not easy to be definitive as to what constitutes a bedroom. Only the city or county building department where the Property is located can determine if a room is a bedroom.
There is, however, one constant factor that is true in every part of the state: Any bedroom added without permits is not a legal bedroom.
II. Claims Regarding Discrepancies in the Number of Bedrooms and Baths
Every year there are many claims and lawsuits brought by buyers against sellers (and their agents) who have found out that the advertised number of bedrooms and baths was not accurate; usually there is a discrepancy in these numbers because the rooms were added without permits and were never approved by the building department as built.
In these types of cases, the buyers claim that they have been damaged because they cannot use the Property as it was advertised and that if they sell it, they will need to reveal the truth about the number of rooms which will negatively impact the value and desirability of the Property. Even worse, are those cases where the buyer must remove some or all of the illegally-added space and/or convert that space back into a garage.
III. Advertising Must Be Truthful
Whenever Agents put information into the MLS (rather than simply accepting the data that is auto-populated by the MLS from a governmental or quasi-governmental source), the Agent must make sure that the information is accurate. Civil Code Section 1088 provides:
“If an agent … places a listing or other information in the multiple listing service, that agent … shall be responsible for the truth of all representations and statements made by the agent or appraiser of which that agent or appraiser had knowledge … to anyone injured by their falseness or inaccuracy.”
If an Agent knows (or has reason to suspect) that the prior listing in the MLS contains false information, the Agent cannot simply use that information “as is” – the mistake must be corrected. If there is a known discrepancy in the available data, that discrepancy must be disclosed in the public remarks section of the MLS.
Once you know the relevant city or county data regarding the legal number of bedrooms and baths, those are the numbers that should be used in all advertising material. If the advertising material uses the inflated numbers, the advertisements must also include the fact that the numbers used are what currently exists at the Property but there is a discrepancy with the public records and then disclose the other numbers. The print size of the disclosure in the advertising material should not be so small that it makes it impossible to read the true numbers.
PRACTICE TIPS:
- If the city or county hard copy files or online information about the total number of rooms, and the number of bedrooms or baths specify a number that is different than what currently exists at the Property or differs from what was previously advertised, the best practice is to use the numbers provided by the governmental entity.
- Be accurate in your description of the Property in the marketing materials. In this case, state that this is a “3-bedroom, 2-bath home, per public records.” Your disclosures need to specify that the bedroom and bath in the garage were “apparently built without permits, and that one additional room used as a bedroom may not be considered a legal bedroom.” Your disclosures should also specify:
I have not and will not verify or further investigate the legal number of bedrooms and baths; buyer should conduct buyer’s own investigation with the appropriate professionals.
- If the Seller believes that there was a misrepresentation at the time the Seller acquired the home, the Seller needs to immediately consult with a qualified California real estate attorney to determine whether or not there is any recourse against the former owner and/or the real estate licensees. The Seller may have to act quickly to avoid any statute of limitations which could bar some of the types of claim that can be successfully pursued.
WEEKLY PRACTICE TIP: DO NOT FORWARD TO CLIENTS. 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.
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