0 comments on “Exactly How Important Is My Home Inspection?”

Exactly How Important Is My Home Inspection?

As I sit in Court, waiting for my client’s case to be called, observing the cases on the docket in front of me, wouldn’t you know it, the next one is a homeowner/Buyer (“Plaintiff”) suing the former homeowner/Seller (“Defendant”) for post-closing inspection issues. This case is dead on arrival, but it should at least be interesting.

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The story is the usual one. Seller and Buyer enter into a standard contract for the purchase and sale of a home. Buyer has a home inspection and plumbing issues are discovered. Major, water running down the walls, type of plumbing issues. Buyer makes plumbing repair requests and Seller says no. Buyer is a tenant and feeling pressure to close anyway because she’s already given her landlord notice. She has spent money on inspections and appraisals. She feels like she has no choice, so she closes anyway. Without the plumbing repairs and water still running down the walls.

Why?

Her agent told her she could just sue the Seller, post-closing.

Wow.

Agents and brokerages were named, but only the Buyer was in the Courtroom and she was clearly shocked the “legal advice” from her agent was completely wrong. The Judge was patient. He was kind. He very gently told her she had no case as he read a large portion of the contract back to her and into the record. The Judge then ever so gently, entered judgement in favor of the Seller.

And by the way, what did the Seller have to say in his defense? Nothing. Absolutely nothing. It wasn’t necessary. He didn’t even appear in Court, nor had he filed an answer to the complaint. He just sent in his lawyer and as it turns out, that was all he needed to do for absolution. Judgment in his favor, and nothing for the Buyer.

So, what is the moral of the story? Representation in the largest financial transaction you will likely make – or the advice and a chance to walk away from it – is always a good idea.

Call us before you close. Better yet, call us when you make your offer. Post-closing issues are rarely resolved to the satisfaction of a Buyer once you leave the closing table.

Don’t be that post-closing, unhappy homeowner. Protect yourself, your investment and your piece of mind.

0 comments on “My Realtor is Acting as a Dual Agent – What Does That Mean and Why Should I Care?”

My Realtor is Acting as a Dual Agent – What Does That Mean and Why Should I Care?

If you are in the hunt for a house, or likewise selling your own, the topic of dual agency will (or should) come up for discussion with your agent.  Most people give consent for their agent to act as a dual agent if the opportunity arises, but do you really know what that consent means?

Under New Jersey law a disclosed dual agent works for both the Buyer and Seller. To work as a dual agent, a brokerage firm must first obtain the informed written consent of their client. It is not necessary that the agent representing both Buyer and Seller be the same person, rather dual agency runs to the brokerage firm. This means if your agent is with one of the handful of large brokerage firms in the area, it is more likely that your transaction will be one in which dual agency applies.

The agent affiliated with a brokerage working as a disclosed dual agent must carefully explain to each party that, in addition to working as their agent, the brokerage firm will also work as the agent for the other party. The agent must also explain what effect working as a disclosed dual agent will have on the fiduciary duties their brokerage firm owes to both the Buyer and Seller.

Dual agency gets tricky in a transaction when the agent is aware of confidential information that would benefit one party and negatively impact the other. A brokerage firm must have the express written permission prior to disclosing confidential information of one client, to the other.

Examples of confidential information includes the highest price a Buyer can afford to pay and the lowest price a Seller will accept. It also includes either party’s motivation to buy or sell. Remember, a brokerage firm acting as a disclosed dual agent will not be able to place one party’s interests ahead of those of the other party and cannot advise or counsel either party on how to gain an advantage at the expense of the other party because of such confidential information.

So why should you care? Well, it’s not likely you’ll be able to avoid a dual agency relationship, and you should not necessarily try to do so. If your agent is a dual agent, it means perhaps it was internal advertising that brought a Buyer to you for your home; but, it does mean you should strongly consider being represented by an attorney in a dual agency transaction. It is the only way to ensure you have an advocate protecting your interests up to and at the time of settlement.

Questions? Feel free to give us a call.

0 comments on “Realtor Exposure Under FDCPA For Doing “Good Deed””

Realtor Exposure Under FDCPA For Doing “Good Deed”

A New Jersey Federal District Court recently refused to dismiss a plaintiff’s claim under the Fair Debt Collection Practices Act (FDCPA) brought against a realtor who took steps on behalf of the landlord-client to try and collect overdue rent from the plaintiff.  As a Realtor you should be aware of this ruling and its potential consequences to keep yourself free from exposure.

 

A landlord took harsh action against the plaintiff, his tenant, who was 10 day delinquent in her rental payment.  The plaintiff/tenant, who was an officer in the US Army, had received a mobilization order which included an annual salary of $84,000.  Presumably in an effort to assist her client, the real estate agent, on behalf of the landlord, contacted the tenant’s military superiors and advised them her rent payment was late. Based on information supplied to them by the realtor, plaintiff’s superiors revoked her mobilization along with the accompanying $84,000 salary.

 

When plaintiff sued both the landlord and the real estate broker under the FDCPA, the broker moved to dismiss, arguing that she was not a “debt collector” as defined under the FDCPA. The FDCPA defines a debt collector as:

 

“Any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due, or asserted to be owed or due to another.”

 

While the broker’s liability has yet to be decided, the court ruled that plaintiff had the right to conduct discovery to determine whether the broker was a “debt collector” under the FDCPA.

 

While it appears the broker may have been attempting to better service the landlord-client, the better practice is to have the landlord collect its own debt or – better yet – refer the landlord to an attorney. Any broker who feels compelled to try to collect rent on behalf of a landlord-client should first become fully conversant with the somewhat labored and intertwined provisions of the FDCPA, and then adhere to its requirements because those who fail to do so could find themselves in expensive litigation in their Federal District Court, which is something no realtor wants.

 

If you have questions about the FDCPA or any other landlord/tenant issues, contact the law offices of Bergmann & Good.  We’re here to help.