When you purchase property in Utah, you will receive a lot of information from the seller. Much of this will come from forms provided to the seller by the seller’s broker or agent. Real estate agents and brokers in Utah may play slightly different roles in real estate transactions, and they require different licensure. However, both may represent home sellers, and both are required to disclose known defects about the seller’s property to prospective buyers. While the seller is individually responsible for disclosing most of the pertinent information about defective conditions on the property, brokers and agents assist in this process, and in some cases must make disclosures directly to buyers.
Utah has recognized that while listing brokers and agents do not have a fiduciary duty to protect the home buyer’s interests — because their main duty is to the home seller, who hired them and agreed to pay them a commission — they do have a duty to act honestly and ethically. (This comes from the court case of Dugan v. Jones, 615 P. 2d 1239 (Utah 1980).)
In fact, while listing brokers and agents must keep information provided to them by their clients confidential, there is an exception to this rule for property defects. (See Utah Admin. R162-2f-401a.) Brokers should disclose known defects to the buyer.
When working closely with their clients, brokers may gain information about a property that should be disclosed. They may notice things that the homeowner did not. However, brokers don’t typically fill out disclosure forms, their clients do. Therefore, if the broker learns that something in a seller’s disclosure is inaccurate, you should expect the broker to contact you and amend the disclosure in writing.
Brokers must also disclose basic information about the property such as the source of their square footage estimate and who they represent in the transaction. Representation is disclosed in the real estate purchase contract, and basic information, including the square footage of the home, is disclosed in a multiple listing services (“MLS”) advertisement. If a broker misrepresents the condition of a property to you as a home buyer, that broker has violated these rules and may have committed fraud.
Brokers and agents routinely rely on MLS data to buy and sell property. These listings provide a brief description of the property and typically a square footage or acreage estimate. While these listing services usually have disclaimers stating that the buyer should verify the listed data, prospective buyers should expect that the agent or broker will not make any knowingly inaccurate or grossly exaggerated statements about the property.
To avoid liability, prudent agents and brokers will start by instructing their clients to disclose whether the property has major toxic damage such as lead based paint or methamphetamine waste, as required by law. Then, the broker or agent will normally assist the client in completing a seller’s disclosure form. This standardized form should outline all of the defects, damages, and conditions that could materially affect the value of the property. The broker or agent may not simply allow a client to lie about the property.
The broker should be especially careful to instruct the seller to disclose any defects that are not necessarily obvious to a reasonably prudent buyer visiting and visually inspecting the site; the seller will not be off the hook just because the buyer conducted an on-site walk-through of the home.
Be sure to ask the broker or agent all your questions about the property. You should expect the broker to provide you with accurate information; especially because home buyers may sue brokers or agents who fail to meet the standards required by Utah law.
If a broker knowingly misrepresents anything about the home, the broker may incur liability for these misrepresentations. A broker cannot merely pass the blame for one of these types of problems to the home-selling client.
You should also feel free to ask that the broker put answers to your questions in writing. Consider communicating with the broker (or having your agent communicate with the broker) via email, and taking some notes on your conversations with the broker. This will allow you not only to gain the information you need before making a decision to close, but will protect you after closing.