The Court held that a broker must disclose that the seller’s neighbor told him he planned to remodel and his remodeled house would overlook the seller’s pool and interfere with the view. This case case also found expert broker testimony is not always necessary to find breach of a broker’s duty care. The Court stated that a layman (the jury) can also decide if a fact requires disclosure. This will save at least $5,000 in expert witness fees!
A seller’s broker has a duty to disclose known material facts to buyers (Civil Code 2079, Easton v Strassburger (1984) 152 Cal.App.3d 90) AND a duty to disclose the same known material facts to the seller. The knowledge of the agent (or real estate broker) is attributable to the principal (See, Civil Code sections 2332 and 2338). This also helps the seller so he knows material facts about his own property (e.g. a neighbor is going to remodel and block his view/privacy).
Seller’s can no longer “close their ears” to neighbor ranting and whining. If material, it must be disclosed! Disclosure between sellers and their brokers is critical (see Carleton v Tortosa (1993) 14 Cal.App.4th 745 and Roberts v Lomanto (2003) 112 Ca;.App.4th 1553) just as between buyers and brokers (either their own or those representing the seller) Seller’s cannot claim “hear no evil, speak no evil” approach to disclosure. In Ryan this non-disclosure resulted in a $1,000,000 damages judgment!