What’s Right? What’s Legal? | Pocono Mountains Association of REALTORS®

By James L. Goldsmith, Esquire

This happens far too often:

An optimistic seller completes his disclosure form. Knowing that his house is nearly perfect and he will get his asking price, the seller checks “Yes,” he will sell the refrigerator, microwave and standalone freezer. Of course, if you know the seller disclosure, you know the section that lists these items does not state that they are included in the sale. Regardless, it is the seller’s thought that these items will remain with the property.

On the basis of her investigation, discussions with the seller, and a tour of the property, the listing agent prepares a multi-list description which provides that the refrigerator, microwave and standalone freezer are being sold with the property at no additional charge.

When buyers eventually come along, they take note of the seller disclosure statement and of the multi-list, and develop a clear impression that the three items will remain with the property. Of course, the buyers have a different opinion as to the value of the property and, to make a long story short, the seller’s initial incredulity at the offer softens and becomes disappointment; and then softens more and becomes acceptance. Eventually, the seller is willing to take an offer far lower than what he expected when he ever-so-optimistically listed his property.

But, our seller is not above grabbing what he can. When the offer is presented to him, he notes that the “Fixture and Personal Property” clause does not specifically include the refrigerator, microwave or the standalone freezer. In fact, the clause merely states that the “built-in appliances” are included in the sale. Rather than list these items in the excluded section, he merely signs the offer and plans his escape . . . with the refrigerator, microwave and freezer!

So, when the buyers call you, their buyer agent, what do you tell them? That dastardly seller was no good and you knew it all the time! Well, I presume most agents will make some statement to that effect and it is understandable. The three items were always intended to be part of the sale . . . should not the seller have at least mentioned something when accepting that low-ball offer?

I tend to agree that the buyers may have gotten the short end of the stick. I also believe to rely on people to do the “right” thing is to be short sighted, unprepared and, perhaps, negligent.

The agreement is the agreement is the agreement! Our agreement says that a buyer cannot rely on any prior representations unless they are in writing, and that the agreement speaks for itself. It is only what is contained in the agreement that is binding by and between the parties. You will find this in Paragraph 22 and, believe me, it will successfully be invoked to protect the sellers.

In order to succeed on a claim of misrepresentation, a buyer must be able to prove reliance. In other words, the buyers must prove they relied on the representation of the seller, or of a specific provision in the contract that the seller also agreed to. In our case, the contract does not state that the three items are to be sold with the property. Our contract states that it is the whole agreement and that the buyers are not relying on the representations in, among other things, the MLS description. What about the seller disclosure?

If you read it, you will see that the checked items are preceded by a caveat that says that the contract controls whether the items checked are included in the sale. If there is an error, it was made by the buyer agent!

This is not to say that there aren’t sellers who will not make good on their promises; some do. However, there are also many sellers who live strictly by the letter of the law. This means that you must do a precise job of protecting your client and make sure the contract says what your clients think it says. Otherwise, it may be you who buys a refrigerator, microwave and freezer. Here is to keeping your money your pockets.

Jim Goldsmith is an attorney with Caldwell & Kearns and serves as general counsel to PAR. A substantial portion of his practice is dedicated to providing advice and counsel to real estate licensees. He and his firm represent and defend real estate salespersons and brokers in civil lawsuits and licensing claims across the Commonwealth. Jim also defends REALTORS® in disciplinary hearings conducted by the Real Estate Commission. He routinely counsels employers on employee relations issues and is one of the voices of the PAR Legal Hotline. He may be reached at www.realcompliance.com.

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