They Did What?! 

Prior to listing their property, the Seller completed the Residential Property and Owners’ Association and Disclosure Statement (RPOADS) and Mineral and Oil and Gas Rights Disclosure Statement (MOG). The Seller marked “No Representation” for their responses on the RPOADS.

Buyer and Seller went under contract using the NCAR/NCBA Standard 2-T Offer to Purchase and Contract. During the Due Diligence Period, Buyer discovered an issue that the Seller chose not to repair, nor did the seller offer concessions. Buyer terminated the contract and requested the return of the non-refundable Due Diligence Fee (DDF). The buyer agent (BA) threatened to file a complaint against the listing agent (LA) with the Commission if the Seller did not refund the DDF based on the seller’s lack of disclosure. The repair issue in question may or may not have been something the LA should or could have reasonably known existed.

In North Carolina, a broker should consider the following points:

• a broker is responsible for discovery and disclosure of material facts;
• while brokers have an affirmative duty to discover and disclose material facts, brokers are not expected to be experts on everything about a property;
• buyer agents should fully prepare their client prior to submitting an offer about the fact that once paid, the DDF is rarely refundable;
• disputes leading to complaints between brokers should be separate from contract negotiations;
• weaponizing the filing of complaints or lawsuits against another broker to have them strongarm their client would be a breach of fiduciary duties and possibly the REALTOR® Code of Ethics.

If you have any questions or need further clarity, you may email Regulatory Affairs at regulatoryaffairs@ncrec.gov.