The National Association of REALTORS® recently reported on a lawsuit decided by the Texas Court of Appeals that all REALTORS® should pay attention to. In the case, the trial court and appellate court decided that a REALTOR® could be held liable for Misrepresentation and Deception Trade Practices (our version of c. 93A) for incorrectly listing a property's square footage on an MLS, that the REALTOR® obtained from the county's appraisal district.
The basic facts of the case are this:
- REALTOR® obtained a property's square footage from the county appraisal district.
- REALTOR® listed the property on MLS with this square footage, and the MLS automates the price/square foot (like MLS-PIN).
- The source of the Property's square footage was NOT a required field on this MLS, but testimony at trial showed that it was standard practice in the industry to identify this source. Because of a clerical error, THE SOURCE OF THE PROPERTY'S SQUARE FOOTAGE WAS NOT IDENTIFIED ON THE MLS LISTING.
- Buyers purportedly based their valuation (at least in part) in the property being listed under the average price/square foot.
- Buyers actually did their own search and verified the county appraisal's office sqaure footage number.
- Before the purchase, Buyers did sign a form provided by REALTOR® that said "I/we have not relied upon any statement given to me/us by the REALTOR and/or his/her associates with regard to the property, and my/our decision to make an offer on the property and to subsequently purchase the property is based on my/our independent decision with or without legal counsel." The form also said, "The Buyer is advised to verify all information important to him/her and to ask the appropriate questions of the appropriate authorities himself/herself or through an attorney with respect to important issues such as . . . size of structure . . . . Any statements with respect to problems or with respect to the availability or existence of any of these items which were made by the REALTOR and his/her associates were made based on information given to the REALTOR by the Seller/Owner and/or government agencies, and/or others, and there is no intention that the Buyer rely on the statements of the REALTOR and his/her associates, and the Buyer is urged to confirm any such statements on his/her own."
- In this case, Buyers actually lived in the Property prior to the purchase and even made making improvements to the house, including painting the interior walls and replacing the flooring in the kitchen and master bathroom.
- Following receipt of a copy of the lender's appraisal, which calculated the square footage as less than the that listed in the MLS, Buyers sued REALTOR® on misrepresentation, and deceptive trade practices and won.
Bottom line, ALWAYS, ALWAYS IDENTIFY THE SOURCE OF A PROPERTY'S SQUARE FOOTAGE WHEN YOU ARE LISTING A PROPERTY OR REPRESENTING A BUYER.