Page 15

Disclose Encroachment

ing the ruling in the state’s Supreme Judicial Court; the appeal is scheduled to be heard in the fall. The Massachu-

A neighbor’s fence cuts into the seller’s lot. As the listing agent, should I disclose that?

setts Association of REALTORS® and the Greater Boston Real Estate Board are preparing a brief in support of the brokers. “We will clearly explain why

Bruce Aydt, abr, crb, is the senior vice president and general counsel for Prudential Alliance, REALTORS®, in St. Louis.

it would be unfair and inconsistent with the legislature’s intent to permit this type of misclassification claim to proceed in the real estate industry,”

ETHICS

title to the property has some “flaw” or “cloud.” The encroachment may also affect the buyer’s ability to sell the property in the future unless the

says William G. Mullen III, legal counsel

A

encroachment is resolved.

tion, or concealment of pertinent facts

encroachment is likely a pertinent fact

Massachusetts Association of

relating to the property or the transac-

that should be disclosed to a prospective

REALTORS®, agrees with the necessity

tion. REALTORS® shall not, however, be

buyer. Most likely this sort of encroach-

of keeping the status quo. “It’s vital to

obligated to discover latent defects in

ment would also be required to be

the real estate industry that brokers

the property.”

disclosed on a seller’s disclosure state-

and director of risk management for the Greater Boston Association of REALTORS®.

rticle 2 of the Code of Ethics requires REALTORS® to avoid “exaggeration, misrepresenta-

Peter Ruffini, president of the

Unless the seller can work with the neighbor to resolve the problem, that

and agents continue to have the ability

The Code of Ethics and Arbitration

ment, whether the disclosure statement

to affiliate as independent contractors

Manual discusses “pertinent” facts: “Ab-

is required by law or by practice. Even if

or as employees,” he says.

sent a legal prohibition, any material fact

the encroachment is considered “minor,”

that could affect a reasonable purchas-

it may still be considered pertinent by a

Redfin Corp. in Alameda County Su-

er’s decision to purchase, or the price

hearing panel in an ethics complaint. As

perior Court and Bararsani v. Coldwell

that a purchaser might pay, should be

in any question of disclosure, the best

Banker Residential Brokerage in Los

disclosed . . . if known by the REALTOR®.”

practice to stay within the Code is “when

The two California cases, Cruz v.

Angeles Superior Court, have not

Included in the concept of pertinent

in doubt, disclose.”

yet gone to trial. They were both filed

facts is a fact that may affect “the

late last year and are seeking class

potential purchaser’s ability to resell

Have a dilemma? Send your ethics

certification. “If these cases are found

the property at a future date.” The

questions to ethics@realtors.org.

in favor of the plaintiffs, in states where

encroachment of the neighbor’s fence

there are conflicts between real estate

onto the property of the listing clearly

and employment laws, that could pro-

may affect what a reasonable buyer

pel interest in lawsuits in other parts

may decide to purchase in that the

an employer-employee relationship for a broker could be more expensive, more burdensome, and more timeconsuming.” By Robert Freedman

Lesley Walker discusses the cases in a video interview. Find it at realtorm.ag/ IndependentContractors.

REALTORMAG.REALTOR.ORG

PHOTO: ISTOCK / CARROTEATER ©2014

of the country,” Walker says. “Having

REALTOR® MAY/JUNE 2014

11

RealtorMag May/June  
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