Executive Summary – First Quarter 2017

Here is an overview of the developments covered in the Legal Pulse Newsletter for the first quarter of 2017. This summary covers Agency, Property Condition Disclosure, RESPA, and Employment issues.

1. Agency: Agency law is reviewed each quarter. During the first quarter of 2017:

  • In a Michigan, a court ruled that a licensee could be held liable for his refusal to submit a rental listing for a property, as well as for his failure to inform the client that he refused to honor her request for the listing. The court also held that Michigan plaintiffs cannot sue real estate professionals for malpractice. (No. 328727)
  • Several states issued regulations on licensee advertising. In Utah, if a licensee is unable to give the name of the brokerage firm in an electronic advertisement, the licensee must link to a clear and conspicuous identification of the broker. Wyoming issued regulations requiring licensees to provide the name of the real estate company name under which they are licensed in all promotional materials. Effective July 1, 2017, in Idaho, the broker’s name must be “clearly and conspicuously” stated on all listed property advertising and in all ads by licensed branch offices. (Utah Admin. Code R. 162-2f-401h; Wyo. Stat. Ann. § 33-28-119; Idaho Code § 54-2053)

2. Property Condition Disclosure: Property Condition Disclosure authorities are reviewed each quarter. In the first quarter:

  • In a Tennessee decision, cabin buyers sued their real estate representative for failing to disclose mold and the property’s age and history. The licensee was not held liable, because she did not have actual knowledge of these issues, even though information about the cabin was considered common knowledge in the community. (No. E2015-01686-COA-R3-CV)
  • In Montana, the buyer’s representative must disclose to the seller when the representative has no personal knowledge of whether adverse material facts about “the ability of the buyer to perform on any purchase offer” are accurate. (Mont. Code Ann. § 37-51-313)
  • In Virginia, an amended statute clarifies that the seller makes no representations with respect to whether the property is subject to conservation or other easements, or whether the property is subject to a community development authority approved by a local government. A new statute requires property owners to disclose to the purchasers if the owner has actual knowledge of any pending enforcement actions or pending zoning violations that the violator has not abated or remedied. (Va. Code Ann. §§ 55-519, 55-519.2:1)

3. RESPA: RESPA is also reviewed every quarter. In the first quarter:

  • In a case challenging the defendants’ captive reinsurance arrangement, the court permitted plaintiffs to amend their complaint to add allegations that may help them avoid the time limit on the lawsuit so that the case may proceed. (No. 11-7928)

4. Employment: We review Employment issues annually. Over the past twelve months:

  • In a California case, a consultant entered into an independent contractor agreement with a licensed broker, who was to provide real estate broker services for the consultant’s business. A provision in the contract stated that the broker was licensed in California. The court held that this provision implied a duty on the broker to comply with California’s regulatory requirements. (No. A140096)
  • The Oregon Real Estate Agency issued Unlicensed Assistant Guidelines. (Unlicensed Assistant Guidelines)
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State Law Based Changes

Read a summary of this quarter's additions to the State Law Based Changes.