Log In   ·   Become A Member

What Should A Real Estate Broker Disclose About A Property?

John A. Viteritti

There is statute and case law that address this issue, not always apparently with consistence, depending upon the variables of the situation. (Photo: Nicole Barylski)

After a two-year absence, I wish to thank Hamptons.com for welcoming me back to write a monthly article for publication. I hope you, the reader, will find them helpful and interesting.

What should a real estate broker disclose about a property? This is a question real estate brokers agonize over. There is statute and case law that address this issue, not always apparently with consistence, depending upon the variables of the situation.

The case of Belizaire v. Keller Williams Landmark II, a Nassau County Supreme Court case handed down on October 16, 2018, where my colleague Al Fazio's law firm, Capruder Fazio Giacoia represented the defendant, provides one example. The broker, Keller Williams, was retained by the seller to represent him in the sale of his property. The broker made it clear by having the seller sign an agency disclosure form required by law that he was representing the seller, not the buyer. The broker prepared a data sheet provided to him by the seller and submitted the information to the Long Island Board of Realtors Multiple Listing Service. The real estate taxes listed were incorrect, lower than they were. The buyer submitted an offer which was accepted by the seller. The title search ordered by the buyer's attorney showed the true taxes. The seller and the buyer went ahead with the closing and title transferred. The purchaser commenced a lawsuit against the broker accusing him of intentionally providing false information regarding the taxes in order to induce the buyer into making an offer.

The court pointed out that the buyer did not provide any proof for the allegation that the broker had intentionally misrepresented the taxes. It further stated, that the amount of the taxes was a matter of public record discoverable by the buyer, and under New York Law which adheres to the doctrine caveat emptor, buyer beware, could have ascertained the taxes, especially since the broker had made it clear that he was representing the seller, not the buyer. It further stated that the buyer did accept the property at closing after it knew what the true taxes were.

The court dismissed the charges against the broker.

Anthony Gatto, Director of Legal Services for the New York State Association of Realtors, (NYSAR), issued a memorandum to its 60,000 plus members regarding this case. In part, he stated: "Under Section 443 of New York State License Law, listing agents do have a duty to disclose material defects to buyer customers. Under Section 443 of New York State Real Property Law, must disclose all facts known to the agent materially affecting the value or desirability of the property, except as otherwise provided by law." He goes on to say: "The amount of real estate taxes on the property, are not a material defect, as they do not physically affect the property." He adds this advice: "Based on this decision, it would be a best practice for all NYSAR members acting as a buyer's agent to verify the taxes with the municipality and school district where the property is located."

At the risk of appearing facetious, I would recommend that it is a good practice to get the taxes right no matter who you are representing.

John is a St. John's University graduate, licensed Real Estate Broker, DOS Certified Instructor, and real estate consultant. He previously taught at NYU, LIU, and The Cook Maran Real Estate School, which he helped found. www.johnaviteritti.com

Be the first to comment on this article. (Just fill out the form below)

Submit Your Comment

Please note, you are not currently logged in. Your comment will be submitted as a guest.
To submit your comment as a member, please click here.
Your Name:
* Comments will be reviewed and posted in a timely fashion
* All fields are required
What color is a banana?
(For spam prevention, thanks)
Southrifty Drug 54 Jagger Lane, Southampton Village
Southrifty Drug is a small, neighborhood pharmacy with limited shelf space, and we have to be very selective about which over-the-counter items we carry. As a result you'll find a no nonsense concentration of very effective, high quality and useful products on our shelves. In this new section, we feature a number of these products that we feel are especially worthy of your consideration.

Burner Law Group, P.C.
Burner Law Group, P.C. are full service elder law attorneys concentrating in the areas of Estate Planning, Trust and Estate Administration and Litigation, Special Needs Planning, Guardianship and Elder Law. Offices in East Setauket‚ NY, Westhampton Beach, NY, and New York, NY.

New York Title Abstract Services, Inc.
We are a title insurance services company dedicated to promptly delivering fully compliant and accurate reports, and title insurance, for residential and commercial real estate throughout New York State. Headquartered in the Hamptons, our professional team has extensive real estate experience and understands the business from all sides including title insurance, legal, sales, governmental, banking, and lending regulations.

Aimee Fitzpatrick Martin, Licensed Associate Real Estate Broker
Considered a West of the Shinnecock Canal expert with a 5-star Zillow ranking, Aimee specializes in the luxury and waterfront markets in Quogue, Westhampton Beach, Remsenburg, East Quogue and Hampton Bays. With exceptional communication skills and a buttoned-up approach to every deal, she is highly skilled in the art of the negotiation process. Understanding the nuances of buying and selling waterfront homes, especially on Dune Road, is a specialty.