Question

I am the Buyers Agent. Both Parties have signed; however, it hasn't been funded yet because it was a notary signing over on the West Side. Two hours after we did our Walk-through, we had a huge storm, and the home had a major water damage event. The gutter was clogged; it leaked like a river down beside the Egress's outside wall and funneled the water down the foundation wall to the seal plate, which then seeped through and up the sheetrock inside. Carpet, Sheet Rock, Insulation, Water Remediation. It is a pretty big job. Sellers's agent wants me to not go to the lender and go ahead and fund because the Seller is willing to make it right. We are in a race last night and today to get quotes, but it won't be dry enough to repair for at least a week. Then depending on when the contractor can do the work??? I don't know what to do. Should we stop the funding/recording and have the work done first? The Seller is super willing to give us a certified check to get the work done after the fact. The Buyer, however, is a Coast Guard Guy who isn't home to manage the work. The Buyer wasn't planning on moving in until the first part of February anyway but is buying the house in part because it is move-in ready! What should or can I do for my client.

Answer

While this answer seems incredibly unhelpful, the ONLY thing broker is licensed and insured to do for this buyer is advise the buyer to seek legal counsel. This question involves analysis that considers purely legal issues. Does buyer have a duty to disclose the damage to buyer's lender? Is seller in breach of contract for failing to maintain the house in its original condition? Is the water event an Act of God? If so, does it excuse the performance of either or both parties? What if buyer closes and seller fails to remediate? What if seller remediates but buyer is dissatisfied with work? What if buyer accepts seller's offer of compensation to complete the work after closing but the work ends up being more extensive or costing more than expected? In that case, will buyer have ongoing rights against seller? There are many more questions triggered by this set of facts and none of the questions involve answers that arise from the provision of RE Brokerage Services ... except the broker's duty, under the Agency Law, to advise her client to seek the advice of an expert in areas that exceed the scope of her expertise. Broker MUST advise buyer to seek legal counsel with respect to this issue and broker's advice should be in writing and provably delivered. A copy of the written advice, along with proof of delivery, should be retained in the firm's transaction folder. The fact that this advice is unhelpful to buyer's immediate need for answers should not result in broker giving buyer advice regarding how to proceed. Broker is neither licensed nor insured to give that advice and there is no clear answer that will solve the myriad problems that exist and that may exist in the future as a result of this unfortunate event. Broker should advise buyer to seek legal counsel and then wait for buyer to instruct broker as to how to proceed. Whether buyer talks to a lawyer is up to buyer but in any event, it must be buyer who tells broker what to do next within the transaction and as a result of these facts. Broker should document buyer's instruction to broker, in the firm's transaction folder.

Date of Posting

1/14/2021

Legal Disclaimer

The Legal Hotline Lawyer does not represent Washington REALTORS® or its members. The advice contained herein does not constitute legal counsel. Please consult with your managing broker for best practices.

Association Name

SPOKANE ASSOCIATION OF REALTORS®