'Legal Hotline Live' Questions and Answers

Below are the answers to several questions addressed by OAR attorneys at the OAR Spring Conference. The Q & A session was part of a program at the Legal Issues Forum called "Legal Hotline LIVE," where some of the more frequent and interesting questions received on OAR's Legal Hotline were addressed.  The Q&A was also featured in several issues of the Tuesday News.

Q. My best friend is an agent with another brokerage. I can't staff an open house on one of my listings this Sunday. Can she do it for me?

A. According to the Division of Real Estate and Professional Licensing, your friend could technically staff your open house. However, this practice is not recommended for a few reasons. First, because your friend is licensed with another brokerage, she does not represent the seller. Therefore, you need to obtain the permission of the seller to have her at the open house. You should also clarify with the seller whether this agent will be acting as the seller's agent at the open house or attempting to capture a buyer that your friend would then represent as a buyer's agent. If she will be acting as a buyer's agent, you need to make sure you aren't disclosing any confidential information to her. Acting as the seller's agent would require that she and her brokerage be appointed to represent the seller.

Further, your friend needs to make sure she is not holding herself out as being an agent of the listing brokerage since she is not licensed with your brokerage. Instead she needs to disclose to potential buyers that she is affiliated with a different brokerage.

Because of these complications, this is probably not the best solution to finding someone to cover for you at an open house.

Q. I represent a buyer who is classified as a sexual predator. Before closing the seller found out and wants out of the contract and claims I should have disclosed this to them. Did I have to disclose it? Can the seller terminate the contract?

A. As a buyer's agent you have no duty to disclose to the listing agent that the buyer is a sexual predator. In fact doing so might be a breach of your fiduciary duty to the buyer if the buyer considers this information to be confidential. If the sale closes, the buyer will have a duty to notify the sheriff's office prior to moving in. The sheriff must then follow the community notification procedures and notify the neighbors, local schools, etc.

As to the enforceability of the purchase contract, although there is no case law to date on this issue, it is doubtful that the buyer's status as a sexual predator would be grounds to terminate the contract. The parties should be referred to their attorneys on this issue.

Q. An appraiser has asked me for information on whether there were any "seller concessions" on one of my transactions. Can I provide that information to the appraiser?

A. The terms of a purchase contract are confidential and should not be disclosed to anyone, including an appraiser, without your client's consent. If you were a dual agent you need the consent of both parties; if you represented only one of the parties, only that parties consent is needed.

Q. I have been contacted to list a life estate for a seller who is entering a nursing home. This is apparently being required for Medicare/Medicaid purposes. Can I do this? Do I have to take this listing?

A. You are certainly able to list and market a life estate for sale. However because of the difficulty in pricing such an interest in real estate and the limited (if non-existent) market for it, you would be free to decline this listing.

Q. I represent a seller who has a contract pending on his property. Before closing there were heavy rains and the roof leaked. Does the seller have to provide an amended Residential Property Disclosure Form to the buyer?

A. It is definitely advisable for the seller to disclose this change in information to the buyer. However under the Ohio Revised Code the seller has no duty to do so by updating the form. In fact by providing the buyer an amended Residential Property Disclosure Form, the seller would be giving the buyer a new three day right to rescind the contract. Therefore, while the buyer should be told about the new roof leak, this can be done by letter, fax, or e-mail so that the disclosure is documented, but no automatic statutory right of rescission is given to the buyer.

Q. A contract to purchase failed due to problems discovered in an inspection. The property is going back on the market. Should the seller revise the Residential Property Disclosure Form to reflect these defects? What if the seller questions the legitimacy of the inspection report? What if the seller repairs the defective conditions?

A. It is definitely necessary for the seller and you to make sure the problems uncovered by the inspection are communicated to any subsequent purchaser. The Ohio Division of Real Estate and Professional Licensing has taken the position that such a negative inspection report is a material fact and must be disclosed by the listing agent, even if the seller questions the accuracy of the report or repairs the defects. Thus, to avoid a potential license law violation, you need to disclose the findings in this report to any subsequent purchasers.

Secondly, it is in the seller's best interests to either revise the Residential Property Disclosure Form or complete a new one. Otherwise the seller is providing a form to buyers with information he knows is inaccurate or incomplete. This could expose the seller to potential misrepresentation or fraud claims.

by Peg Ritenour
Vice president
Legal Services

For more legal FAQs visit the Legal Library at OAR's web site at www.ohiorealtors.org.