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Home Sellers Liable for Real Estate Agent's Misrepresentation

Updated on August 26, 2016

Home Seller Liable for Misrepresentation By Real Estate Agent Describing Bad Odor

Home sellers can be liable for the misrepresentations of their real estate agents if they are sued by buyers, according to a recent state court decision.

Home buyers Justin Fong and Suzanna Fong purchased a California seaside home from Phillip Sheridan.

While they toured the home before buying it, they noticed a strange, moldy odor in one room.
The real estate agent, who was a dual agent, told the buyers the odor was from sea air and could be eliminated by changing things like sheetrock.

The Fongs noticed an oil-like odor on the first floor after they moved in to the home. After the odor continued for two years, the Fongs hired a contractor to investigate.

The contractor discovered a septic tank and an oil tank buried on the property.

The buyers notified the real estate broker and the seller about the underground tanks before having them removed during a remediation procedure. Some of the oil spilled as one tank was being removed, creating a stronger odor and need for additional remediation.

The Fongs soon moved away from the home as the chemical odor continued. The entire house had to be removed to fully remediate the property.

The buyers sued the seller, the real estate agent and the broker. They accused them of fraud and misrepresentation.

The trial court rejected the fraud claim under principles of law that apply equally in the Washington area as in California. However, the court said the seller could be vicariously liable for negligent misrepresentation by the real estate agent who said the odor was sea air.

The court awarded damages for the investigation to discover the underground tanks and remediation of the property.

The case is Fong v. Sheridan, No. A144286, 2016 WL 1626221 (Cal. Ct. App. Apr. 21, 2016).

Home Sellers Can Be Liable for Their Real Estate Agents' Misrepresentations to Buyers

Home Sellers Can Be Liable for Their Real Estate Agents' Misrepresentations to Buyers
Home Sellers Can Be Liable for Their Real Estate Agents' Misrepresentations to Buyers

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