Risk Management Tip - Advising Buyers on Matters of Public Record

Civil Code Section 2079 specifically states that real estate agents are not obligated to inspect public records.  Therefore, agents are not required and should not undertake the obligation of inspecting public records, including, but not limited to the following:  sex offender registries (including Megan’s Law website); permitting records; zoning records; and public records regarding square footage.

Agents representing buyers are many times, resistant to this advice.  Selling agents feel that it is part of their job and their duty to their clients to undertake this work.  However, it is not within the standard of care to require selling agents to undertake research of public records.

A recommended practice is to advise a buyer regarding the issue and how the client can undertake their own investigation.  For example, if a seller represents the square footage of a house to be 3,000 sq. ft., but the tax records indicate that the square footage is 2,500 sq. ft., an agent can advise their buyer as follows: “The seller represents the square footage to be 3,000 sq. ft.  The tax assessor’s office represents the square footage to be 2,500 sq. ft.  If this square footage discrepancy is of concern to buyer, buyer is encouraged to investigate this issue.  The buyer can undertake the following investigation without limitation:  obtain and review the appraisal for the property, which contains the appraiser’s opinion of square footage and value of the property; contact the tax assessor’s office and inquire as to the basis of the square footage;  retain an appraiser or contractor to measure the square footage; ask the seller for the basis for the seller’s opinion of the square footage; ask for copies of plans for the house; and/or ask the seller for historical records, such as prior appraisals, which reflect the square footage.”  This is not an exhaustive list, but examples of recommendations a selling agent can make to a buyer to verify square footage.

It is emphasized that an agent should not undertake this investigation, but should advise the buyer to do so.  If an agent undertakes this investigation, the agent becomes responsible for any errors in that investigation or potentially, errors in the resulting information.

Shannon B. Jones, Partner sbj@sbj-law.com