April 1, 2017

Risk Management

Risk Factor #1
When selling properties, a real estate professional should be aware of site conditions that may impact a property. Waterfront, ocean view homes are susceptible to flooding and soil issues. Jane Smith should have reviewed the disclosure statement with the sellers to make sure any issues with the home or property were disclosed.

 

THE FACTS
Mr. and Mrs. Brown decided to downsize after their children moved out of their west coast, ocean view home. To market their home, they enlisted the help of their good friend, Jane Smith, who was also a licensed real estate agent.
Because of the home’s desirable location and move in-ready appeal, it sold quickly to new owners, Mr. and Mrs. Williams. The new owners were initially leery of purchasing a home so close to the waterfront, but the Brown’s signed disclosure statement, which noted they were not aware of any problems with the property, drainage or flood problems, or any condition that would adversely affect the quality, safety, soil or physical structures, gave them peace of mind they had made a solid investment.

Shortly after the new owners settled into their new home, a series of strong storms pummeled the area. The Williams’ awoke one morning to find their backyard gone. The proper-ty had experienced a catastrophic landslide that destroyed their backyard, including a patio area and retaining wall. The Williams’ immediately contacted local municipality for help. The municipality advised they had record of a previous land-slide at the property’s address. Further investigation re-vealed the previous owners, Mr. and Mrs. Brown, had an engineering firm access the property following the first land-slide. The engineering report on file stated the land was unstable and that future movements could occur at any time. (Continue Reading)

The RE/MAX® E&O Protection Plan Risk Management Bulletin is produced by Capital Professional Insurance Managers, Inc. and CNA/Victor O. Schinnerer & Co., Inc. This bulletin is compiled from information provided and reprinted with the permission of CNA/Victor O. Schinnerer & Co. The comments and opinions contained herein are not to be construed to be legal advice by Capital Professional Insurance Managers, Inc., Victor O. Schinnerer & Co., Inc. Continental Casualty Company (CNA) or the RE/MAX E&O Protection Plan Insurance Program. This information is made available to you for your risk management program. No action should be based on this information without appropriate advice from legal counsel and a review of your current applicable statutory and case law.