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By Shannon Allen<\/div><\/div>\n

Can guessing lead to an ethics complaint if a buyer later finds out it\u2019s wrong and makes a formal complaint? I thought a nearby development might be a new mall but it was actually a manufacturing plant.<\/p>\n<\/div>\n

ORLANDO, Fla. \u2013 Dear Shannon<\/strong>: I\u2019m a homebuilder and I showed one of my new houses to a buyer. The buyer then asked me about nearby construction and its future use. I said, \u201cI really don\u2019t know, but I think it\u2019s the beautiful new mall proposed for this area.\u201d <\/span><\/span><\/p>\n

After closing, the buyer found out it was not a beautiful new mall \u2013 it was a manufacturing plant. The buyer says they never would have purchased the property had they known that a manufacturing plant was going to be built so close. Now the buyer filed an ethics complaint against me claiming that I failed to determine a pertinent fact. <\/span><\/span><\/p>\n

I gave an honest answer to the buyer. I didn\u2019t know what was being built at the time. I did know that other builders were planning on building a large mall somewhere in the area. I was just trying to be helpful, so, I guessed.<\/span><\/span><\/p>\n

I told the buyer upfront that I didn\u2019t know, so doesn\u2019t this cover me? \u2013 Guessing<\/span><\/span><\/p>\n

Dear Guessing<\/strong>: Okay, so I really like your impulse to be helpful. It\u2019s probably one of the characteristics that makes you an outstanding Realtor\u00ae. However, that\u2019s not really how this works. Telling the buyer you don\u2019t know doesn\u2019t provide protection for you when the next thing you say is an incorrect speculation about a pertinent fact that you probably should have clarified before sharing.<\/span><\/span><\/p>\n

It\u2019s okay to say, \u201cI don\u2019t know.\u201d However, if you follow that up with an incorrect guess, then this could be an issue under Article 2 of the Code of Ethics. <\/span><\/span><\/p>\n

Article 2 states: Realtors\u00ae shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction. Realtors\u00ae shall not, however, be obligated to discover latent defects in the property, to advise on matters outside the scope of their real estate license, or to disclose facts which are confidential under the scope of agency or non-agency relationships as defined by state law.<\/em><\/span><\/span><\/p>\n

In this case, the buyer had a question about construction nearby. This question concerned a pertinent fact relating to the property or transaction. Your competence in the real estate industry required you to know the answer or, if you didn\u2019t know the answer, you probably should have considered telling the buyer you would to try to get the answer. (see Case Interpretation #2-7: Obligation to Determine Pertinent Facts<\/a>) Remember: Always be the source of the source of information.<\/span><\/span><\/p>\n

You started with, \u201cI don\u2019t know,\u201d but then went on to tell the buyer a guess. The buyer was reasonable in relying on your answer, which unfortunately turned out to be incorrect. This was obviously a big deal to the buyer and it is a potential issue under Article 2.<\/span><\/span><\/p>\n

Shannon Allen is an attorney and Florida Realtors Director of Local Association Services<\/em><\/span><\/span>
Note: Advice deemed accurate on date of publication<\/span><\/span><\/p>\n

\u00a9 2022 Florida Realtors\u00ae<\/span><\/span><\/p>\n<\/div><\/div>\n

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