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Hello all—I have some questions about a realtor’s responsibilities and a recent transaction in which we were involved. I’m hoping someone here can tell me how to handle this. Apologies in advance forthe long post!
My husband and I recently sold a house in an older neighborhood in the Houston, Texas area. The house was built in the late 50’s, and about a year ago the city notified most of the residents in our neighborhood that the sewer lines for our houses needed to be replaced, or we would be charged $20/month on our waterbills. We opted for the $20/month, already knowing that we wouldn’t be in the house by the next year.
While completing the seller’s disclosure, I asked our real estate agent specifically about the sewer line issue, telling her about the replacement vs. the $20/month. She said since there was the option of the monthly charge and no demand from the city for replacing it, we didn’t need to list it on the disclosure.
Fast forward to having sold the home and moving out. We disconnected utilities, etc., and the new owners took over. The very next day, our first day in our new home, we got a call from our agent saying that the buyer's agent "was really upset" because the buyers were told by the city that the water could not beconnected until the sewer was replaced. I told her that we had discussed that issue when we completed the disclosure, and she went on to say that we were responsible for replacing it because we “knew about it and did not disclose it”. I reminded her that she told us not to include that in the disclosure, and she said that unless we wanted to get sued, we needed to pay for replacing it. She would not discuss the advice she gave us about the disclosure and would only say that the bottom line was that we were responsible and we better do it right away.
We didn’t know what to do and certainly didn’t want have legal problems, so we replaced the sewer. A week or so later, the new owners had their new sewer and we had spent $3400. In addition, we had to handle all the contact and discussion with the buyers about the situation during the process. After the initial call from our agent to tell us about the issue, we never heard from her again.
We were absolutely stunned--this was the first time we sold a house, so we had done research, tried to make good decisions, listened to our realtor, and hoped for the best. It all went pretty well until thishappened. The tone our agent took withus when we questioned our responsibility was upsetting, as was the lack of support from her, and the cost. Of course, I have no documentation or recording of the conversation we had about the disclosure and the sewer issue, so it’s her word against ours. We resigned ourselves to it just being “one of those things” and were glad to be done with it all.
Now, a couple of months down the road, we’re not so surethat this was all our responsibility. How should this situation have been handled by our agent? If she did the right thing advising us not to disclose, why were we responsible for the replacement cost? If it wasn’t right, can we do anything about it at this point? Does she have any responsibility regarding the disclosure information instructions she gave us and/or the money we had to spend because of it? Is there a way to recover our costs? Thanks for any insight!
Last edited by GlamMa'am; 07-08-2013 at 01:52 PM..
Reason: Remove font type and size information, correct spacing
Ultimately, in Texas the sellers' disclosure is solely the responsibility of the seller. The real estate agent cannot provide legal advice and cannot fill out the disclosure for you (and I'm sure you signed paperwork acknowledging that).
She gave you bad advice (you knew there were problems with the pipes because the city told you so, and that SHOULD have been disclosed whether or not the city required the pipes to be replaced now). However, she is not responsible for the repairs. I strongly suspect that if you had noted this on the disclosure, the buyers likely would have insisted that you replace the sewer lines before they agreed to buy the home (I certainly would have). Either way, I think you would have been out that cost.
However, also in Texas, the listing agent is required to disclose any problems with the house that they might know about. So the buyer might have a case against the listing agent.
George--yes, it is complicated. We have considered an attorney but wanted to see if there was anything we could do before taking that route.
Aggie--yes, you are correct. We did know that the pipes would eventually have to be replaced, but since it was not a requirement at the time, we didn't know if it should be disclosed. We could see it both ways--disclose because it would eventually be an issue OR do not disclose because it was not a current issue because the city gave us an option. That's why we asked our agent. Regarding the buyer wanting the pipes replaced before they bought the house, I agree. They probably would have (rightly) asked for that. In that case, though, we also would have been aware of having to pay for the replacement and would have certainly considered that in negotiations. That's where we feel that the agent has a responsibility. She told us to omit something we thought might be an issue, and it cost us $3400.
about a year ago the city notified most of the residents in our neighborhood that the sewer lines for our houses needed to be replaced, or we would be charged $20/month on our waterbills. We opted for the $20/month, already knowing that we wouldn’t be in the house by the next year.
While completing the seller’s disclosure, I asked our real estate agent specifically about the sewer line issue, telling her about the replacement vs. the $20/month. She said since there was the option of the monthly charge and no demand from the city for replacing it, we didn’t need to list it on the disclosure.
She was wrong and you knew she was wrong.
Good luck getting her E&O to cover you.
Texas Horse Lady--that's exactly what we thought--that she (and we) had a responsibility to disclose all known issues. Like I said above, we could see it both ways. Eventually, the pipes would have to be replaced, which is an issue, but there was no deadline for replacement. Since the pipe replacement was not a requirement at the time and with the option the city gave, we could see how it would not need to be disclosed. We thought that surely she knew what was required in disclosure and what was not, and trusted her. Not having sold a home before, we relied on her advice. If she didn't know and/or did not want to advise, she should have said so. We would have called the city (which, in retrospect, we should have done anyway) if she indicated to us that she thought it could be a problem.
Mr Rational--no, we did not know she was wrong. If there was a statement by the city that required that the pipes be replaced immediately or by a certain date, there would have been no question about disclosing. As it was, it was a notice that had no time requirement and gave a long-term option to replacement. We were trying to do the right thing regarding potential buyers and regarding our rights as sellers. We had no intention to deceive, and that's why we asked for help.
I agree with the info you've been given to seek out a real estate attorney. I was taught very early on that agents shouldn't offer any advice to sellers regarding the disclosure except to be complete and honest. But, I do have questions about what you wrote. First, did the letter you received from the city explain that the $20/month option was only available to you while you lived there? If not, how would you know to disclose anything beyond the $20 surcharge? Did you disclose the surcharge thinking that was all you needed to do?
More importantly, though, it seems to me that, whether you knew it or not ahead of time, the issue was inevitably going to come up and, realistically, I doubt that any buyer would have subsequently agreed to a negotiated full or partial payment. In other words, you were probably going to have to spend the money for the sewer replacement in order to sell your house. If that's true, everything else probably doesn't amount to much. Nevertheless, if you feel wronged, by all means, talk to a real estate attorney.
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.. closing went nice n smooth.
