BROKER RISK MANAGEMENT
WEEKLY PRACTICE TIP
Attribute and Disclaim
Q: How do I disclose information I have that I haven’t verified, or that I cannot verify?
A: This situation comes up quite frequently in the following types of situations:
1. Square footage or acreage.
2. When neighbors or third parties tell you that:
A. There is a sex offender in the neighborhood.
B. There are drug dealers next door.
C. There was a crime committed in the neighborhood.
D. There was a landslide, flood or other natural disaster in the area in the past.
E. There are nuisances in the neighborhood (obnoxious neighbors, noises, etc.), of which seller is not aware.
DISCLOSURE STANDARD: The case of Salahutdin v. Alcantara sets forth the duties of an agent when they receive information from a third party and then pass that information along (e.g., from listing agent to buyers agent; or from buyer’s agent to buyer). In such cases the agent must state where they received that information (ATTRIBUTE), and either confirm that information (not recommended) or disclaim that the information has not been confirmed (DISCLAIM).
Certain types of information SHOULD NOT be confirmed by you:
o Do not measure to verify square footage – it is too easy to make a mistake and there are several methods for measuring square footage and it is conceivable to have several wildly differing measurements of the same property.
o Do not check public records – Civil Code § 2079.3 states that agents need not check “public records or permits concerning the title or use of the property.” If you choose to check public records, it is too easy to miss something or make an error while undertaking a duty you don’t have.
o Do not check the Megan’s Law database – if you do, then you are on notice of the contents of that database and must disclose it all on this and future transactions.
o Do not check police records – Again, if you do check police records, did you check them all, did you get it right? Then, you must disclose all that you found out not only in this transaction, but future transactions in the area.
PRACTICE TIP: Whenever you receive any information from third parties (neighbors, other agents, internet, sellers) which can materially affect the value, condition or desirability of the property, you must disclose that information using the ATTRIBUTE and DISCLAIM model:
“(Listing/Buyer’s) Agent has been informed by _________ (Source)______________ that ___________(the information)____________. (Listing/Buyer’s) Agent has not verified that information. Buyers should conduct their own investigation of this information.”
For further information on this topic see Weekly Practice Tips entitled:
“Square Footage, Avoiding the Perils”
“Disclosing Unverifiable Information”
“Megan’s Law Database Online”
“Public Records”
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.
© Copyright Broker Risk Management 2011 06/03/11