Suspecting Unethical Behavior

[jan46]

We just bought our house.  The listing agent was also the owner/occupant.  Now that we've been in the house for 2 months, major problems are cropping up:  No heat source in MBA; microwave installed 12.5" above range surface; no shut off valve on hot water tank; no main shut off valve in house at all; both chimneys failed inspection and cannot be used; we paid for about 100 gallons of oil that we didn't receive.  Upon questioning regarding the oil, our realtor admitted she took a verbal report on the quantity from the owner/broker: no third party reading was ever done.  Our home inspector who overlooked the code violations was recommended by our agent.  While having plumbing work for the bathroom hot water tap which began leaking immediately upon our arrival, the plumber asked who sold us the house.  Then he asked who our agent was.  Then he shook his head and said "Ah.  Those two know each other.  I've done work on several houses behind those two."  I mentioned the home inspector and he said "He's part of the group."  We had wanted a chimney inspection done before negotiating repairs, but our agent strongly discouraged this.  The inspector made a small notation that he was unable to locate the main shut off valve and that the current owners should be contacted, but the owner/broker/occupant was home and present for the entire inspection.  Nothing was said to my husband at the time of inspection, and the missing valves never made the summary page.  Nor did the microwave or the absent heat source.  We now have reason to believe our agent may have shared our bottom dollar line with the owner/broker, and hid the presence of a previous inspection report until the day of our own inspection.  Of course by then, a number of recommended repairs had been made and our inspector used that to distract from bigger, more costly, necessary repairs.  Interestingly, our agent knew the fireplace was a main selling feature for us, and she was adamant we shouldn't have the inspection because if the deal fell through for any reason, then we would have paid to clean and inspect someone else's chimney.  We've never had a chimney, so we didn't know about linings, mortar joints and so on.  Our agent never gave any indication she had worked with this broker before; in fact, she insinuated many times that she knew nothing about him.  Yet our plumber made an immediate connection with the names.  We understand all of this is circumstantial, but we now have concern that our agent may have some sort of business arrangement with this broker/seller which was not used to our advantage.  Since this is a verbal tipoff from a contractor and a lot of coincidences,(although increasing in number and shadiness by the day), how would we even get a process started so the situation could be looked into?  We don't want to make undue accusations, especially of this serious an issue, but we have definite concerns.  We certainly would have negotiated lower for the chimney repairs(totaling $5300, so far), and the plumbing/heating work.  Not to mention our missing oil, which we're still fighting for.  Any light you can shed would be greatly appreciated.  Thanks in advance.

ANSWER: Dear Marie:

Depending upon the state in which you live, your report raises a number of possible illegal actions by your agent, possibly involving not only actions but the types of legal disclosures with which you may have been entitled to receive. In order to help provide for you a more complete analysis, I would like to know the state in which you live and the type of real estate license your agent possessed, i.e., broker, or salesperson, or any other category your state issues. I would also like to know if you received from the seller a property defect disclosure independent from any home inspection conducted. Please inform me also if the seller disclosed in any manner the fact that the seller was a real estate licensee.

You might also consider reviewing or having an attorney review your sales contract. You may there find other obligations overlooked by the agents involved.

I will also be able to provide some analysis regarding the ethics involved if you can advise if the agents are members of the National Association of Realtors, thereby allowing the use of the REALTOR trademark by the agents as well as requiring the agents to abide by that association's code of ethics. You may be able to identify such by simply looking at the agents' business card or other advertising.

I will be able to provide some broad overviews and will be able to point you in the direction of your state's statutes, administrative rules, and enforcement procedures and personnel, as well as whether your state has a fund--as is typical of many states--from which you may obtain money should a state enforcement investigation prove violations of law.

Finally, you might in the mean time check online for your state's real estate commission web site and look at the enforcement history of the agents involved. You need not disclose the result to me, but you may find it to be useful insight even at this point.

Sincerely,

Denis Caravella

---------- FOLLOW-UP ----------

Thank you for answering, Mr. Caravella.  Here is the additional information for which you asked.  We are residing in Asheville, NC; our agent is a licensed broker and a member of the Asheville board of Realtors.  We contacted the board and gave the above information to the woman there who handles grievances.  We were told any type of alliance between the seller and our agent would be hard to prove, and that we should just go after the home inspector to have his inspection fee refunded.  That's not a satisfactory solution for us because the repairs will cost much more than the inspector's $500 fee.  It also doesn't address possible(and I stress possible) misconduct on the part of an agent who is still actively practicing and who, if guilty, will affect many more unsuspecting people.  At that point, the woman at the board became ubrupt, said she would mail the forms, and we could fill them out if we wanted to: she then terminated the call.  Our agent did make us aware that the former owner/seller was also a licensed broker.  There was a seller's disclosure, 1 page in length, and everything was checked "NO" as to knowledge of any problems, ever.  I don't believe we received a copy of it.  We are very short on funds and hesitate to get an attorney involved, for fear of the cost.  I contacted the agent who helped us sell our PA house and she thought we should schedule an appt. with the broker who owns the agency our buyer's agent works for.  She suggested possible mediation, but said the owning broker should be made aware, without making accusations, that a concerning situation may(may) exist.  Thanks, in advance, for any further insight and/or guidance.  As you might imagine, we're sick over this.