Duty of Dual Agent to Disclose Certain Information About a Home

Case Study:

This week, we will discuss below a Louisiana 3rd Circuit Court of Appeals case dealing with a dual agents’ duty to disclose certain information obtained by her concerning the condition of a home.

Waddles vs. Lacour, Sr., et. al., 950 So.2d 937 (La. App. 3 Cir., February 7, 2007) 

Real estate agents represented both buyer and seller.  Home was marketed as a “custom built” home.  A dual agency agreement was signed, a contract was executed between buyer and seller and the sale was closed.

After moving into the home, the buyer received three (3) phone calls from neighbors advising buyer that his home was previously a mobile home.  Buyer sued sellers and real estate agents alleging sellers and real estate agents failed to disclose that the home was previously a mobile home.

At trial, one of the real estate agents admitted she received three phone calls from neighbors inquiring whether the home used to be a mobile home. Each time she received a call, the real estate agent would tell the seller who replied that there previously was a mobile home on the property when they bought the land but it was gone. The real estate agent admitted it did raise her suspicions but she believed the seller.  The real estate agent testified she did not tell the buyer about the three calls because she was satisfied with the seller’s response.

Trial Court found in favor of buyer.  Real estate agents appealed.

On Appeal, the 3rd Circuit Court of Appeals held the fact that the home was constructed around a preexisting mobile home is information that the buyer should be made aware of by the real estate agent pursuant to La. R.S. 9:3897(A)(2).

The real estate agent argued she relied on the denials of sellers that the home was a mobile home.

According to the Court of Appeals,

“We acknowledge that sometimes agents will get calls about property for sale and are not obligated to disclose a simple anonymous call. However, in this case there were three calls informing the real estate agent that the home for sale used to be a mobile home.”  Three (3) phone calls were enough to require the real estate agent to disclose the phone calls to buyer.  Failure to disclose the three (3) phone calls to the buyer was deemed negligent misrepresentation.

A couple of notes about this case:

  1. If facts or circumstances would lead an agent to believe that the sellers of a home are not being truthful about the condition of a home (or that sellers are just mistaken), the agent should dig a little further to get the truth;
  2. At the very least, a real estate agent should disclose the discovered facts or circumstances to his/her client and let them do a little more digging to make an informed decision on the property to be purchased.

 

For any questions concerning this email, please contact me at rye@tutentitle.com.

H.L. “Rye” Tuten, III, is a Title Attorney/Real Estate Closing Attorney and Owner of Tuten Title & Escrow, LLC. Formerly assigned by RICE Insurance to defend real estate agents throughout Acadiana, much of his more than nine years’ litigation experience is with real estate concerns.

The information contained herein is simply for informational purposes only and not intended to provide legal advice or create an attorney-client relationship.