Article 2, Part 3
The Situation & Complaint
REALTOR® A, a REALTOR® principal, was asked to list a neglected house that obviously needed a wide range of repairs. He strongly advised the owner that it would be to his advantage to put the house in good repair before offering it for sale, but the owner wanted it sold at once on an “as is” basis. REALTOR® A wrote a novel advertisement offering a “clunker” in poor condition as a challenge to an ambitious do-it-yourself hobbyist.
A few days later, REALTOR® B, a member from REALTOR® A’s office, showed the house to a retired couple who liked the location and general features, and who had been attracted by the ad because the husband was looking forward to applying his “fix-up” hobby to improving a home. The sale was made. Shortly thereafter, REALTOR® B was charged by the buyer with having misrepresented the condition of the property.
REALTOR® B attended the hearing, armed with a copy of the candid advertisement. The hearing established that the buyer fully understood that the house was represented to be generally in poor condition, but that while inspecting the house with a view to needed repairs, REALTOR® B had commented that since the house was of concrete block and stucco construction, there would be no termite worries since termites could not enter that type of construction. However, after the sale was made, the buyer ripped out a sill to replace it and found it swarming with termites, with termite damage to floors in evidence. Further questioning established that there had been no evidence of termite infestation prior to the sale, and that REALTOR® B had volunteered an assurance that he thought was well grounded.
REALTOR® B, prior to the conclusion of the hearing, offered to pay the cost of exterminating the building and the cost of lumber to repair termite damage in view of his failure to recommend a termite inspection, which was the usual and customary practice in this area. The complainant stated that this would satisfy him completely. It was the Hearing Panel’s view that while REALTOR® B’s actions were commendable, and would be taken into account by the Hearing Panel, REALTOR® B was still responsible for the errors and misstatements. The Hearing Panel concluded that REALTOR® B was in violation of Article 2.