Mr. Sellers came to REALTOR® Brown's office explaining that his company was transferring him to another city and he wished to sell his home. In executing the listing contract, Mr. Sellers specified that the house had hardwood floors throughout and that the selling price would include the shutters and draperies that had been custom made for the house. Mr. Sellers said that he would like to continue to occupy the house for 90 days while his wife looked for another home at his new location, and agreed that REALTOR® Brown could show the house during this time without making a special appointment for each visit. Accordingly, REALTOR® Brown advertised the house, showed it to a number of prospective buyers, and obtained a purchase contract from Mr. Buyer. Settlement was completed and at the expiration of the 90-day period from the date of listing, Mr. Sellers moved out and Mr. Buyer moved in.
On the day that Mr. Buyer moved in, seeing the house for the first time in its unfurnished condition, he quickly observed that hardwood flooring existed only on the outer rim of the floor in each room that had been visible beyond the edges of rugs when he inspected the house, and that the areas that had been previously covered by rugs in each room were of sub-flooring material. He complained that REALTOR® Brown, the listing broker, had misrepresented the house in his advertisements and in the description included in his listing form which had specified hardwood floors throughout. Mr. Buyer complained to REALTOR® Brown, who immediately contacted Mr. Sellers. REALTOR® Brown pointed out that the house had been fully furnished when it was listed and Mr. Sellers had said that the house had hardwood floors throughout. Mr. Sellers acknowledged that he had so described the floors, but said the error was inadvertent since he had lived in the house for ten years since it had been custom built for him. He explained that in discussing the plans and specifications with the contractor who had built the house, the contractor had pointed out various methods of reducing construction costs, including limiting the use of hardwood flooring to the outer rim of each room's floor. Since Mr. Sellers had planned to use rugs in each room, he had agreed, and after ten years of living tin the house with the sub- flooring covered by rugs, he had simply forgotten about it.
REALTOR® Brown explained, however, that Mr. Sellers description, which he had accepted, had resulted in misrepresentation to the buyer. But it's a small point, said Mr. Seller. He'll probably use rugs too, so it really doesn't make any difference. After further pressure from REALTOR® Brown for some kind of adjustment for Mr. Buyer, Mr. Sellers concluded, It was an hones mistake. It's not important. I'm not going to do anything about it. If Mr. Buyer thinks this is a serious matter, let him sue me.
REALTOR® Brown explained Mr. Sellers attitude to Mr. Buyer, saying that he regretted it very much, but under the circumstances could do nothing more about it. It was at this point that Mr. Buyer filed a complaint with the Association.
Did REALTOR® Brown violate Article 2?
Answer: At the hearing before a Hearing panel of the Professional Standards Committee of REALTOR® Brown's Association, during which all of these facts were brought out, the panel found that REALTOR® Brown had acted in good faith in accepting Mr. Sellers' description of the property. While article 2 prohibits concealment of pertinent facts, exaggeration and misrepresentation, REALTOR® Brown had faithfully represented to Mr. Buyer information given to him by Mr. Sellers. There were no obvious reasons to suspect that hardwood floors were not present throughout as Mr. Sellers had advised. REALTOR® Brown was not in violation of Article 2.