So you just finalized a listing agreement for an exciting property that you can’t wait to advertise to the world for your customer. Like any good listing, you really want this one to stand out among the other similar listings in the area. After spending time at the property and with the owners it is apparent that the property abuts a pathway that leads directly to the beach, which the owners say they have enjoyed the use of for many years. As you sit down to draft the property description for the MLS listing, you smile over the fact that the headline-grabbing first line practically writes itself: BEACH ACCESS!!! Those two words together with the sunset pictures of the pathway leading to the beach will surely have buyers lining up to tour the property.
There is only one problem: there is no beach access! Sometime after closing the buyers discover to their great dismay that the pathway to the beach crosses over a parcel of land which is not owned by them; furthermore, the new owners do not have a legal right to use the pathway to access the beach. That is not exactly what the buyers thought they were signing up for! After the buyers pick their jaws up off the floor, their first calls are likely to be to their agent who sold them the house and to the agent who listed the house and incorrectly advertised it as a property with “BEACH ACCESS!!!” At this point, the questions the listing agent and agent’s broker will undoubtedly be asking themselves and perhaps their legal counsel is “What is our liability and what are the potential ramifications for the agent and the broker?
All listings entered into the StellarMLS (Mid-Florida Regional MLS) system do include disclaimers that state all information provided is not guaranteed and should be independently verified. Similarly, both the Standard and As Is FAR/BAR contracts contain disclosures stating that “Buyer agrees to rely solely on Seller, Professional Inspectors and Government Agencies for verification of property condition, square footage and facts that materially affect property value and the representations (oral, written or otherwise) of Broker.” However, Section 475.21(1) of the Florida Statutes provides that the Florida Real Estate Commission (“FREC”) may impose certain fines and penalties on licensees who have “advertised property or services in a manner which is fraudulent, false, deceptive, or misleading in form or context.” The fines and penalties for a first offense include fines ranging from $250 to $1,000 and/or a 30-90 license suspension. While having to pay fines and coping with the suspension of a license is bad enough, it certainly is not the worst or only repercussion that can occur in this situation.
The new owners may decide to proceed with a legal action for damages incurred due to their reliance on the misleading listing against the brokerage, the brokerage’s insurance carrier, the listing agent and perhaps others. The facts of the case will obviously determine the new owner’s likelihood of success, but brokers and their agents should not rely on the disclaimers and disclosures in the MLS and FAR/BAR contracts alone as a protection against legal action, as those disclaimers and disclosures are by no means a bar to legal action for damages. In order to avoid the potential of future legal action or fines and penalties imposed by FREC, the best course of action is to be very careful when describing the property, and rely on facts that have been verified by professionals rather than representations made solely by the seller. And check that listing twice before submitting!
As always, should you have any questions about any of the issues raised by this blog please do not hesitate to contact your trusted local real estate attorney.
Sincerely,
Andrew J. Conaboy, Esq., aconaboy@berlinpatten.com
Berlin Patten Ebling, PLLC
This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.
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