Will’s All-Time Top Ten Questions BY WILL MARTIN, GENERAL COUNSEL
In commemoration of the 100th anniversary of NC REALTORS®, I wrote this article to reflect the top ten questions I’ve fielded through the Legal Hotline during my twenty-five years at NC REALTORS®. It was a really hard thing to do—so many questions! What I’ve done is list the most common categories of questions I’ve gotten over the years (in no particular order of importance), pose a question representative of each category, and identify two or three relevant Legal Q&As, which can be found on the NC REALTORS® website. Just for fun and as a nod to history, I’ve included an eleventh category of questions that I used to get all the time, but don’t get any more.
CATEGORY #1: Buyer’s right to refund for
misrepresentation/omission of material fact (This type of question has been around a long time, but is coming up more now due to the size of due diligence fees that are being paid.) QUESTION: Does a buyer have the right to a refund of their Due Diligence Fee if the property is misrepresented by the listing agent or seller? ANSWER: As a general rule, a seller doesn’t have to disclose anything to a buyer about their property, which is why the “no representation” option appears on the Residential Property and Owners Association Disclosure Statement. However, a
seller could potentially be held liable for any damages the buyer can prove they have sustained as a result of the seller misrepresenting the property in a material way or actively hiding some defect about the property, or for failing to disclose a latent material defect that would not be discoverable by the buyer in the exercise of reasonable diligence. A seller is also bound by his agent’s material misrepresentation of the property to the same extent as if he had made the misrepresentation himself; thus, a buyer may potentially have recourse against both the listing agent/listing agent’s firm and the seller for recovery of their DDF if the listing agent misrepresents the property. • A seller’s duty to disclose latent material defects Category: Disclosure • Can a buyer recover the due diligence fee based on a listing agent’s misrepresentation? Category: Disclosure.
CATEGORY #2: Has a binding contract been formed? (This category of questions is as old as dirt.)
QUESTION: Buyer agent submits signed written offer on Form 2-T to the listing agent. After communicating with the seller, listing agent texts buyer agent to inform her that the offer is acceptable to the seller and that as soon as the seller sign it he will email her a signed copy. If the listing agent later
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