Be Truthful About Scope of Repair Work

Even though the buyer's engineer missed some damage, you still have to disclose what you know.

October 1, 2009

Q: I’m listing a commercial retail property that’s now under contract. As part of the purchase agreement, the buyer requested a roof inspection. During the inspection, the engineer identified some damage that the buyer asked the seller to have professionally repaired. My client agreed. But while undertaking the work, the repair professional found the damage to be more extensive than was previously recognized and told the seller that additional work is needed to restore the roof to a good condition. The seller wants to limit the repair only to the damage identified in the initial inspection and doesn’t want me to report the additional damage. Shouldn’t the additional problems be communicated to the buyer?

A: Yes, the additional defects discovered by the roof repair professional should be disclosed under Article 2 of the Code, which provides that "REALTORS® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction. REALTORS® shall not, however, be obligated to discover latent defects in the property, to advise on matters outside the scope of their real estate license, or to disclose facts which are confidential under the scope of agency or non-agency relationships as defined by state law."

You had no obligation to discover the additional roof defects. But, once the defect was discovered and disclosed to you, an obligation under Article 2 arose.

Regardless of how the defects were discovered, failing to disclose them now would amount to concealment of pertinent facts about the property.

Bruce Aydt

Attorney Bruce Aydt, ABR, CRB, SRS, is a national real estate educator, a Missouri real estate broker, and past chair of the National Association of REALTORS® Professional Standards Committee.