16. Disclosure of Conditions Affecting the Value or Desirability of Listed Premises

Matter of Roberts Real Estate v. DOS (171 A.D.2d 217, Appellate Division, Third Dept. [October 20, 1991]) - Third Department reverses DOS finding of failure to disclose (51 DOS 90) based upon Real Property Law §442-c, where representative brokers did not have actual knowledge of the alleged incident New York Court of Appeals (80 N.Y.2d 116, October 20, 1992) affirms, with modification that the relevant "actual knowledge" is that of corporate officers, directors and representative brokers; applies RPL §442-c to prohibit suspension or revocation on vicarious basis, and remands to DOS to reconsider lesser sanctions

38 DOS 93 Matter of DOS v. Roberts - on remand opportunity to submit additional evidence on appropriate lesser sanctions, if any

73 DOS 93 Matter of Roberts - on remand, failure to supervise reduced to sanction of $1,000 fine on corporate broker; fines for representative brokers remain as initially imposed [no discussion of the "failure to disclose" charge which was annulled by the Appellate Division. Under the Court of Appeal's restriction on the imposition of vicarious liability for fines has opposed to suspension or revocation), -only the "failure to supervise" charge was pursued on remand]

Stambovsky v. Ackley (169 A.D.2d 254) - "ghost house" case. Broker as agent for seller is under no duty to disclose to the potential buyer that premises in question have a reputation of being haunted; seller's silence is not actionable. Contract rescission granted under unusual facts of case

Stigmatizing conditions - NYSAR requested DOS clarification regarding disclosure of alleged disease of former occupant of property (afflicted with AIDS or HIV virus). June 17, 1992 letter of Executive Deputy Secretary of State Baldwin asserts that a fact may not be necessarily a physical attribute of real property to be "material." Suggested approach attached

129 DOS 92 Matter of DOS v. WNY Metro Colvin Realty - DOS fails to prove allegations; broker disclosed defect; advised purchaser inspection could be done and offered second appointment when purchaser's inspector failed to appear

Opinion Letter 92-53 (John L. Harter) - real estate broker representing seller of property located in historic district subject to special regulations. Materiality is question of fact determined on case by case basis; recommends high standard of disclosure

Opinion Letter 93-18 (Georgiana Diaz) - if permitted by the Americans with Disabilities Act, disclosure should be made of plans for a group home for disabled adults across the street from a residential listing. [Note: it appears that the ADA does prohibit such disclosure]

Opinion Letter 93-20 (Joan Collins) - seller's agent may show a buyer customer a "sold book" when it is in seller's best interest to do so; should not volunteer if it would alert the customer that the asking price is higher than comparable sales; should comply with specific request to provide as part of duty to deal honestly

94 DOS 93 Matter of Parenti - incompetency in renting apartment in illegal two-family house without checking certificate of occupancy; unreasonable to rely on owner's claim of two-family status without making reasonable inquiry; restitution of rental commission

Criscuola v. PASNY, 81 N.Y.2d 649 - fear of electromagnetic frequency ("cancerphobia") even if irrational, can affect the market value of premises adjacent to power transmission lines

CRC #592 Matter of DOS v. Johnson, Consent Order - misrepresentation by failure to disclose material fact of 10' easement; unauthorized practice of law (Judiciary Law §478) by preparing statement without attorney-approval clause; fine of $2,000

Opinion Letter September 7, 1995 (Fran Weingartner) - Group homes; disclosure obligations ; Federal Law prohibits a broker from advertising or making unsolicited representations regarding the existence of a group home within the proximity of a listed residence. DOS will not take disciplinary action against a licensee who declines to respond to direct inquiries regarding the presence of such a facility

77 DOS 95 Matter of DOS v. Deppoliti, et al. - auctions; pleadings amended to conform to proof; individual proper party where license under non-corporate assumed name; obligation of honesty before fiduciary obligation upon agency; working farm improved by 1-4 family residence requires disclosure form under RPL §443 but is not governed by 19 NYCRR 175.24; false representation demonstrates untrustworthiness; failure to disclose back taxes demonstrates incompetency; complainant failed to establish unlicensed practice of law; buyer’s premium earned on acceptance of offer per contract; demand for unearned commission demonstrates untrustworthiness; failure to pay court costs equivalent to failure to pay judgment; failure excused due to reliance on attorney advice; revocation

1 DOS 98 Matter of DOS v. Fiumera - proper business practices; broker licensed in her individual name violates RPL §440-a when not also licensed as an associate broker while working under the name and auspices of another broker; broker not required to disgorge commission where individually licensed and additional associate broker’s license would be issued pro forma upon payment of licensing fee; broker did not engage in fraudulent practice when advised homeowner that radon report was acceptable when she reasonably acted upon advice given to her by the party taking the test; broker’s offer to pay for remedial work indicates a good faith offer of settlement; $250 fine

65 DOS 98 Matter of DOS v. Perrello - fraudulent practice; DOS fails its burden of proof; DOS fails to establish that broker had knowledge that the basement leaked and that there were problems with the plumbing fixtures and pipes and that broker failed to disclose such facts to the purchaser; purchaser never met with broker and broker was not asked about the basement or the condition of the plumbing; buyer’s broker requested listing broker to sign property condition disclosure form at time of contract, but listing broker refused to do so stating same was not required; complaint dismissed

185 DOS 05 DOS v. Britt - disclosure of conditions affecting the value or desirability of listed premises; DOS fails its burden of proof; res judicata; judgment rendered in civil court between buyer and seller is not controlling in administrative proceeding against licensee where DOS and licensee were not parties in the civil suit and professional conduct of the licensee was not litigated; duty of disclosure to a buyer by a seller’s agent is derivative; seller’s agent must make the same disclosure to a buyer that the law requires a seller to make; disclosure by seller’s agent to buyer’s agent of the condition of the property as known by seller’s agent was timely, proper and essentially a disclosure to buyer of that information; DOS has failed to prove by substantial evidence its allegation that basement flooding was a common occurrence or that broker was fully aware that homes in the neighborhood where the property is located encountered frequent flooding; complaint dismissed

463 DOS 08 Matter of Fraser – broker; breach of fiduciary duty; use of form not in compliance with NYCRR 175.24; violation of 175.4 dismissal of charge of listing at price far less than fair market value, and failure to disclose licensee status; failure to supply agency disclosure; $1,500 fine

683 DOS 08 Matter of Yearsley – failure to disclose material defects, failure to supervise; six months suspension for salesperson, $1,000 fine for broker

853 DOS 08 Matter of Sterling – broker renewal; failure to secure seller’s signature on §443 form; false business address; renewal application for dissolved corporation; revocation

1192 DOS 08 Matter of Fish – broker; availing of license; false statement to obtain corporate license; revocation of broker license and revocation of notary public commission

262 DOS 09 Matter of Galligan – broker; relative of seller; failure to disclose material defects; misleading advertising; agency disclosure; discouraged home inspection charge dismissed; failure to properly supervise; $2,000 fine and license had lapsed; $500 fine re: sales associate

424 DOS 09 Matter of Saraceno – appraiser; condition of premises; inconsistency in testimony; inherent unlikeliness of complainant testimony; complaint dismissed

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