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Is it legal for a listing agent to with hold a prior inspection report that shows major problems? To not even disclose that an inspection has been done?
The only reason we found out that the house had already been inspected, was that we just so happened to choose the same inspector that had looked at the house when it first came on the market. The inspector gave us the origonal report which was very thorough and noted what needed to be done to correct the problems he found. NO effort had been made to correct the problems, unless you count an attempt to cover up/hide some termite damage in the floor joists. Many of the problems found required major work to be done by a contractor.
The listing agent gave us a property disclosure when we went under contract, and none of the problems found by the inspection were noted in the disclosure. Everything was checked "No Problems" or "Unknown". But now we have found out that yes there are problems and yes they did know.
We are out of the contract but we are very upset with this listing agent and thinking about filing a complaint with the R.E. Commission. This has wasted our time, our agents time, our LO's time, our insurance agents time, our inspectors time and it has cost us money. Several other houses we were interested in are now off the market and we've lost valuable time and oppertunities. I understand that things pop up to kill a deal, but this feels like we were flat out lied to and strung along because the agent was perfectly aware of the problems and failed to disclose them.
I should add that the listing agent is trying to pass this house off as acceptable for USDA and VA financing (it will not qualify for these loans with the problems it has).
First question is, did the seller or listing agent actually have a copy of the prior inspection report?
Such reports belong to the buyer who pays for it and are not always (or even often) passed on to the seller or the seller's agent. Sometimes the buyer will try to negotiate repairs, and in those cases sometimes the report, or small portions of it, will be sent to the seller. Other times the buyer simply decides to terminate the contract (in Texas, if the buyer has an option period, that can be done for any or no cause during that option period) without attempting to negotiate repairs and in such a case the seller and their agent may have no idea what as in it and certainly can't produce it because they don't have it. The inspector is not supposed to give a copy of the report to the seller, because he doesn't own it, the buyer does.
So, it is possible that the listing agent and seller (who is responsible for filling out the disclosure, not the agent) knew about the problems, but it is equally possible that they did not. That the house was inspected under a previous contract that fell through is not evidence either way.
A listing agent can only disclose material facts about the property above and beyond what the seller discloses. Inspections are done by buyers. If the listing agent never received a copy of the inspection report, there is nothing for him/her to disclose to you. A verbal comment from a buyer or buyer's agent is meaningless without a written report for documentation. If the agent received such report, yes, it should have been disclosed through the seller's disclosure notice. You would have to be able to prove the agent had the inspection in his/her possession in order to have any case against him/her.
Your inspector has issues of his own. He is not "allowed" to provide someone with someone else's inspection report unless he has been granted permission by the person who paid for it. At least in Texas that's the way it is. The inspectors are licensed, insured and bonded and inspections are specific to the person who paid for it and only good/guaranteed for the date of inspection.
The listing agent has addmited to my agent that he knew of the problems found in the first inspection.
There is no licencing required in my state for inspectors. The report we recieved was the origonal report with updates to show where improper repairs and cover-ups had been made.
I will look up my state specific laws... I did not realize it varried so much. I believe we had to provide the inspection report in order to cancel the contract.
Last edited by SheridanPDC; 12-01-2012 at 01:54 PM..
Sellers need to disclose problems from previous inspections
I've bought and sold quite a few properties over the past 20 years. I have been told by licensed real estate agents that if an inspection reveals something that contradicts what the sellers had put on their disclosure form, that they must sign a new disclosure form with those changes (some would call corrections) to the document. Not sure if the sellers have to provide the report but they can no longer claim they (the sellers) didn't know this or that when filling/signing the disclosure form to their realtor.
For example, an inspector informs potential buyers that the roof leaks, the sellers refuse to fix it and the buyers walk. Do you think that the sellers can continue handing out their (state required) disclosure form that indicates that there are no leaks in the roof? Same goes for a Radon test. If a potential buyer gets a radon test done, it shows high levels of radon (say over 15 pCi/L) and the sellers refuse to fix it that the sellers can still maintain that they had no idea there was a radon problem? What about lead paint? Last one - sellers think their home was built in 1979 so they don't check the lead paint requirement on the state form (it's a Federal requirement). A sellers inspector discovers the house was built in 1969. The sellers should legally be required to update their disclosure form saying that the home was built earlier and could have lead paint.
This is part of the reason why homeowners DON'T get their homes tested for radon if they plan on selling their house soon. This way they can legally (and I guess ethically) claim they didn't know their house had higher than acceptable levels of radon.
The listing agent has addmited to my agent that he knew of the problems found in the first inspection.
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Then I strongly encourage you to file a complaint with the state's real estate agency. I don't think there is a single state where an agent can withhold material facts/defects about a property.
A verbal comment from a buyer or buyer's agent is meaningless without a written report for documentation.
Here the verbal counts and must be disclosed. It would be a "Buyer agent disclosed that the previous inspection report showed blah, blah. Seller has no knowledge of defect and buyer to do their own due diligence regarding the accuracy of that statement." or something along those lines. We also will disclose differing professional opinions as they are material to a buyer.
Then I strongly encourage you to file a complaint with the state's real estate agency. I don't think there is a single state where an agent can withhold material facts/defects about a property.
If the house was a Foreclosure or an Estate the owner would in TX be exempt from providing a sellers disclosure. Don't know if OP mentioned who the seller was.
A listing agent can only disclose material facts about the property above and beyond what the seller discloses.
Then why didn't the listing agent disclose all of the defects in the property regardless of whether the seller knew about them or not? That was a facetious question of course but you need to proof read your posts and use proper english.
Inspections are done by buyers. If the listing agent never received a copy of the inspection report, there is nothing for him/her to disclose to you. A verbal comment from a buyer or buyer's agent is meaningless without a written report for documentation.
Not sure where you came up with this totally inaccurate information? (That was not a facetious question) Your own Texas Association of Realtors legal beagle team has even published at least one article in your monthly TAR rag dispelling this myth! It does not matter how a seller or their agent heard about a defect that does exist they must still disclose it! Aren't agents in Texas required to have annual leagal and ethics updates?
If the agent received such report, yes, it should have been disclosed through the seller's disclosure notice. You would have to be able to prove the agent had the inspection in his/her possession in order to have any case against him/her.
Again totally inaccurate as all the plaintiff would have to do is prove that the seller and/or the agent knew of the defect no matter how they were told.
Your inspector has issues of his own. He is not "allowed" to provide someone with someone else's inspection report unless he has been granted permission by the person who paid for it. At least in Texas that's the way it is.
That might well be the case in Texas but the OP is in Wyoming (from their profile).
The inspectors are licensed, insured and bonded and inspections are specific to the person who paid for it and only good/guaranteed for the date of inspection.
Then why do Texas agents regularly hand out prior inspection reports to buyers as a marketing tool even though the inspection was performed for a previous buyer that walked away? Why do Texas agents use those 3 month old prelisting inspections that were prepared for the seller by an inspector who didn't know what he was doing in the first place and wrote a very poor report? I'll answer the question for you since it won't be answered or truthfully answered in this forum by anyone. They use those bad inspection reports as marketing tools because the bad inspection report makes the house look a lot better than it really is! I've seen enough of them and have had to deal with buyers who have been ripped off by them!
Yes in Texas the inspectors are licensed, and yes they are required to have insurance but where did you get "bonded" from? Do you know what bonding is? Texas home inspectors are not required to be bonded and quite frankly bonding is just another feel good marketing tool that service people of all types use as it is very useless to consumers!
I have added comments and questions above in blue. You really should speak with your broker and/or a lawyer before you provide inaccurate information!
I have added comments and questions above in blue. You really should speak with your broker and/or a lawyer before you provide inaccurate information!
I did not provide inaccurrate information. An agent's job isn't to disclose verbal things that anyone can say about a property as that verbal information could be inaccurate. Put the information in writing, and it's something to disclose. An angry buyer could say that the house has some massive issues just to say them, and you think a listing agent is obligated to tell other buyers about this inaccurate information? No! If there is a report with issues in writing, yes there must be full disclosure IF THE SELLER OR LISTING AGENT RECEIVED THE REPORT. If there is nothing to prove anything, there is nothing to state to another buyer. There are too many disgruntled buyers out there for that.
And yes, many listing agents disclose a previous inspection because once it was given to them, the previous buyer granted their permission for others to view it. It doesn't mean a new buyer isn't supposed to get their own inspection. It doesn't mean the seller didn't go and fix things in that report and provide receipts in addition to the inspection. That's completely different than an inspector giving a report that was bought by someone else.
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Sellers need to disclose problems from previous inspections
