Executive Summary – Fourth Quarter 2017

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

  1. Agency: Agency issues are reviewed each quarter. During the fourth quarter of 2017:
  • Two cases addressed the liability of dual agents. In a case from Pennsylvania, the listing broker had worked with the buyer on many prior occasions, advised the seller to accept the offer well below asking price, and then relisted the property on its website for the buyer at the original asking price. The court found the broker was not liable for breach of fiduciary duty. ( No. 17-2012 .) In the other case, the seller was licensee’s company, and the licensee sold to the buyer at a price above the property’s actual valuation. A jury awarded $10,000 in damages to the purchaser. (No. 13-2015-CA-014064.)
  • Connecticut amended its statutes governing agency disclosure. A real estate licensee who represents a seller, lessor, prospective purchaser or lessee in a transaction must disclose, in writing, the identity of his or her client to any party to the transaction who is not represented by another real estate licensee. ( Ct. Gen. Stat. § 20-325d , as amended by P.L. 17-169 .)
  1. Property Condition Disclosure: We review Property Condition Disclosure materials every quarter. In the fourth quarter:
  • In a Massachusetts case, the purchaser bought a property for which the listing incorrectly stated the property was a three-family structure. The listing representative argued the information was based on tax assessor records. The jury entered a verdict in favor of the licensee and broker. (No. 1584CV0008.)
  • Iowa amended its property condition disclosure laws to provide that the disclosure statement may be delivered electronically. The statute also now states that transfers to a person within the third-degree of a blood relation or affinity are not subject to disclosure requirements. ( Iowa Code § 558A.2 (2017).)
  1. RESPA: RESPA authorities are also reviewed each quarter. In the fourth quarter:
  • A New York federal court determined that the plaintiff failed to allege a claim for violation of RESPA based on table funding. The complaint did not allege that the loan was contemporaneously funded by a third-party source other than the loan originator. ( No. 16-CV-2607-LTS-JLC .)
  1. Fair Housing: Fair Housing issues are discussed annually. Over the past year:
  • The U.S. Supreme Court issued a decision in the City of Miami v. Bank of America case regarding discriminatory lending practices. The court found that the City’s alleged financial injury fell within the zone of interests protected by the FHA. However, the Court remanded for a determination of whether the lender’s actions proximately caused the injury. ( 137 S. Ct. 1296 .)
  • Multiple cases considered whether advertisements indicated a discriminatory preference for a particular group of individuals. ( No. 3:17-CV-206K , No. 15-CV-2506-MMA (DHB) , No. 16-CV-463-LM .)
  • Missouri modified the legal standard for proving housing discrimination. In order to succeed, a plaintiff must show that the discrimination was motivated solely by membership in a protected class. ( Mo. Rev. Stat. § 213.040 (2017) .)


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State Law Based Changes

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