Property Condition Disclosure Highlights: 1Q 2018

In the Property Condition Disclosure case retrieved this quarter, the court considered whether a broker and brokerage firm could be liable for allegedly providing incorrect information about the nature of a parking lot sold with a commercial building.

A. Cases

1. H & S Building Investments, LLC v. Irani, No. 1-17-0614, 2017 IL App. (1st) 170614-1 (Dec. 29, 2017)

Claim dismissed because there was no evidence that broker and his employer knew parking lot was actually two separate tracts of land.

The purchasers of a commercial building allege that the broker and his brokerage failed to provide correct information about the property and an adjoining vacant lot. Purchaser entered

into two separate transactions to purchase the building and the vacant lot. After closing, the purchaser learned that the fenced-in parking lot consisted of two separate tracts of record, and that the purchaser had purchased only one-half of the lot. Purchasers allege that the broker incorrectly indicated the entire lot was for sale.

The complaint did not allege that the broker knew the property was less than the entire fenced-in lot. The broker had no duty to disclose facts about which they had no actual knowledge, and a licensee does not have a duty to undertake an investigation for hidden defects. Furthermore, the legal description of the property was attached to the purchase agreement, so the purchaser could not have relied on any false statement by the broker. The appellate court affirmed dismissal of the claims.

B. Statutes and Regulations


The Iowa Legislature passed a law prohibiting local governments from adopting ordinances that require compliance with any action or payment of any fee before property may be refinanced or conveyed. [1]

The Real Estate Commission amended its rule relating to the electronic delivery of a property condition disclosure statement. The delivery will not be deemed complete until the transferor receives written acknowledgment that the statement has been received. [2]


An amended Virginia statute [3] will require the Real Estate Commission to develop a form advising parties top a real estate transaction to review the property condition disclosure form on the Commission’s website.

C. Volume of Materials Retrieved

Property Condition Disclosure issues were identified in 1 case ( see Tables 1, 2). The case addressed the issue of boundaries. Two statutes and one regulation regarding Property Condition Disclosure issues were retrieved this quarter ( see Table 1).

Table 1

Volume of Items Retrieved for First Quarter 2018

by Major Topic

Major Topic








Property Condition Disclosure








[1] Va. Laws Ch.60 (effective July 1, 2018).

[1] Iowa Laws Ch. 1013 (effective July 1, 2018).

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State Law Based Changes

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