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failure to disclcose a citation

How much weight to failure to disclosure have?  We bought a property to be used as  a rental.  Seller also was going to use it for a rental but was denied and cited for not having egress windows (the windows were all brand new but seller did not obtain a permit so they were not legal in the bedrooms) she and agent knew this fact and also had a written citation from the building inspection.  On the citation it indicated "If Seller has a buyer the buyer must be informed of these citations"  One month later she sold the home to use and did not disclose.  When we tried to obtain a renters license we were told the windows had to be egress.  We ripped out the new windows in bedrooms and put in egress for $2500.  We informed  seller and agent (who acted as a dual agency)  but the realtor said take us to court we are not paying.  we believe she just wanted to get the full commission.  Even though we waived the inspection the the problems cited would not have come up - this was clearly failure to disclose which was written.  The real estate company told the seller "We will not settle - we would rather go to court otherwise everyone will start suing us if they knew that we settle"   What recourse do we have - Conciliation Court?
  • February 09 2013 - Isle
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Answers (9)

Not a legal person. Often you go through an intermediary and see if the seller/agent will agree.  We go to Superior Court-often a small claim court showing the bill and hopefully judge is on your side.

In CA the agents carry an error & omissions insurance policy and often it is paid out of this insurance. 
  • January 18
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Profile picture for wetdawgs
@Dominicks:

"dual agency" is something of concern in buying/selling.  You are describing a rental.

It is normal when a person wishes to break a lease for them to pay the costs of rerenting the property, as well as rent for the period when the property is vacant.   (the alternative is to pay rent for the duration of the lease)   The landlord does not have to accept potential tenants that you bring by your advertising.



  • January 17
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Profile picture for dominicks
I rented a house.  The agent was J working for Real Estate company C.  The broker for Real Estate company C was the listing agent for the house I rented.  Throughout the process I dealt with agent J.  Agent J signed my lease as my agent.  The broker from Company C did not sign the lease, but she did get the commission. Later, when I was trying to get out of the lease because my life changed, I called agent J.  Agent J told me she worked with the broker for Real Estate Company C. and " was on the same team."  I thought that the agent, who signed the lease as my agent, and the broker, who listed for the landlord, were not working together. The box about dual agency was not checked on my lease. Instead, Agent J signed the lease as my agent, but her boss, who listed the property, did not sign the lease as the seller's agent. I think there was dual agency here that was not disclosed.  When I called Agent J to help me list the house so I could get out of the lease, she told me "her boss" the broker had to list it.  The landlord insists on listing the house with the broker and that I pay the commission. I feel like I was duped into signing the lease....
Do I have any cause of action?
  • January 17
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OK, so everyone wants to blame you for not having buyer representation and waiving inspection.  You know by now those were both major mistakes.  If everything you say is true, the Realtor is in violation of articles 1,2,4,9,10, and 11 of the National Association of Realtors Code of Ethics.  Contact the Minnesota Association of Realtors (800.862.6097) to make an ethics complaint.  The ethics hearing process will not award damages to you, but the Realtor involved may be censured, fined, suspended, etc.  Believe me, this is not something any Realtor would want to go through.  No Realtor can afford to have something like this in their file.

Was there a seller disclosure?  If the seller lied on the disclosure, and the Realtor was aware of it, you may have a clear civil or arbitration suit against both of them.

This will require effort on your part but in the end you may get a little justice.  Your first call should be to an attorney who specializes in Real Estate law.  I have a recommendation for you and your first consultation is at no charge. 
  • February 10 2013
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The real estate company told the seller "We will not settle - we would rather go to court otherwise everyone will start suing us if they knew that we settle" 

The company that holds my license would have probably settled IF they had determined the agent had erred in not disclosing facts known to them. It's very expensive to be sued - especially if you're going to be on the losing end. Minnesota law allows for defendants to retrieve court fees should the plaintiff file unfounded lawsuits. So there's a mechanism in the law that prevents 'everyone' from suing them. Their argument is fallacious and grounded in ignorance of the law.

If you, the seller and the agent have signed arbitration (an option in MN) then you are legally bound to arbitrate the case. If not, your best (and least expensive bet) is conciliation court. In Minnesota damages of $2,500 would be covered under conciliation court. This is a far less expensive alternative than a full out lawsuit. And you can, if you choose, use an attorney. But you can litigate the claim on your own, too. Your county government office will have instructions on filing suit.
  • February 10 2013
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That is a good point you can still call up the local association of realtors to file a formal complaint against the realtor. Almost all of us are part of a local association as well as the state of Minnesota. We are self-governing, and some of the penalties that could be enforced on this Realtor is loss of MLS access. This essentially shuts down his business until that access can be re-gained. 

No matter what file with Minnesota's commerce department. Unless consumers file complaints nothing will change. 

If you want you can try one more time to resolve with listing agent. I personally think my reputation is worth $2500 bucks and would just take it out of my own commission. Problem solved and move on. 
  • February 10 2013
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Whatever you decide to do on suing or seeking arbitration, at least report it to the state licensing authority.  I suspect that a license violation has occurred.  Such violations occur with greater frequency than necessary because people fail to report them, and agents believe they can get away with it.

I don't know if the agent knew about the inspection during the listing, even so, denying that you have a claim against the seller where they acted as a dual agent is hopefully a violation.   
  • February 09 2013
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It is unfortunate that this situation occurred, but you went dual agency when you should have had an agent representing you AND you waived inspection when you should have inspected.  Now you are complaining.

Fortunately you are not without recourse. Dual agency does not relieve the seller from disclosure, although they can say they did not know you intended to use as a rental. But if the Agent knew, then they are also required to disclose.

First contact the agents broker. If they won't budge file a complaint withe the state RE Agency. They may throw some money at you just to go away.

Of course a strong worded letter from an attorney may help, but the cost will likely exceed the benefit.
  • February 09 2013
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Did you agree to arbitration or no? In Minnesota this is OPTIONAL but we have to sign the PA stating that both sides have considered. If you AGREED than that is your recourse because you basically waived your right to sue in court. IF YOU DID NOT AGREE than yes you essentially will have to sue the seller.

I hope this has taught you 2 things:

1) Buyer's agents are not just sales people we are an insurance policy, and on top we are free to work with since the seller pays our commission. It is standard procedure ESPECIALLY if you are turning the property into a rental to always check permits. Always check with the city and county because you just never know when something pops up. It is just standard procedure. That is what a good Realtor does. We all have had that "one big mistake as a realtor" that taught us some hard lessons. It is that very same experience that allows us to protect our buyers because we don't let them make the same mistake. 

2)  You waived the inspection and did not check with the city at all. What due diligence did you do? EVEN with a realtor a buyer should never assume anything. 


Personally although it sucks I would probably just walk away from this situation. You go to court and the fees are not going to make you much money back on what you spent on the windows...that assumes you win.

On the other hand it should make you happy that the listing agent's greed could seriously punish him if you choose to take legal action. There is RISK TO DUAL AGENCY AS A LISTING AGENT! A very big risk actually.

The next step is to obtain an attorney to review all of the purchase documents for this transaction. He will guide you from there. 
  • February 09 2013
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