Injuries to potential buyers and brokers while viewing property are not uncommon. This article explores the liability of owners to invitees to a resale property and to houses under construction.
Open Houses and Showings
Homeowners are generally responsible for exercising reasonable care to make a property safe for those invited onto it. This general duty to make a property reasonably safe includes repairing dangerous conditions that are known or could be reasonably discovered by the homeowner or warning guests of their existence.
However, to recover for an injury suffered on and because of someone else’s property, the injured party must have been exercising “ordinary care” when they were nonetheless hurt.
Georgia common law follows a modified comparative theory of negligence, where the law aims to place the burden of an injury on the party best situated to have avoided it. In other words, an injured party can only recover damages for an injury if the party was comparatively less at fault for the injury than the person being sued. The law only requires that the owner or occupier of land ensure that the property is safe enough that a person who does manage to hurt herself is comparatively more to blame for her injury than the owner or occupier of the land.
Does a property owner owe a special duty to someone who may come on to listed real estate solely because of having seen a “For Sale” sign. This issue came up recently in two separate instances in which homes were listed for sale and “For Sale” signs were placed in the yards. Two different buyers saw the signs and decided to walk onto the properties on their own to have a look around. Both suffered significant injuries when, for one a deck, and for the other a stairway fall. They both sued, claiming that the owners owed them a duty to warn about the defective conditions; even though the owners had no idea these prospects were on the properties. As if often the case, there are two appellate decisions in Georgia addressing similar issues, both of which reach opposite conclusions.
The safest course is for owners to post warnings or rope off areas of the property that might be unsafe, no later than when a “For Sale” sign is placed on their property.
How do you get rid of uninvited people on your property? How about guests that have overstayed their welcome? Do you call the sheriff or go to court? It depends on the situation.
What is a Squatter?
A squatter is someone who occupies a property or area of land without lawful permission and has the intention of living there as if they were the owner.
What is the Relationship Between a Squatter and Adverse Possession?
Adverse possession is the set of legal elements that give a squatter the right to gain legal title of a property. The terms adverse possession and squatter’s rights are often used interchangeably. It takes at least 7 years (if the squatter acts under color of title) or 20 years of exclusive, actual, open (visible), hostile (no permission) and continuous use by the squatter to satisfy the legal requirements to gain title by adverse possession. It is difficult at best.
What is the Difference Between a Squatter and a Trespasser?
A trespasser is someone that knowingly enters someone’s house, building or land without permission or authorization, but without the intention of claiming the property as their own. Trespassing is a criminal offense. Call the Sheriff.
On the other hand, a squatter is claiming ownership. To get rid of a squatter, the owner must go through the civil court system (rather than the criminal system). File a lawsuit. The Sheriff can’t help.
The GAR form Seller’s Property Disclosure (SPD) provides for disclosure of insurance claims made during the Seller’s Ownership. If insurance claims have been made and they are not disclosed, the Seller may be accused of misrepresentation and fraud.
Why Disclose Insurance Claims?
There are several reasons.
First, disclosure by the seller avoids a claim by a buyer that the Seller misrepresented the property or did not disclose a material fact. If proved, it can cost the seller a lot.
Second, the SPD puts buyers on notice of issues that may affect their decision to buy. For example, if there was an insurance claim for a plumbing leak, the buyer would want to inspect the area to be certain the leak was properly corrected.
Third, the buyer’s home insurance premium can be much higher than expected if the seller has made numerous claims. Insurance companies do not want to insure a problem house. Depending on the number of claims, the buyer could have trouble getting insurance. Or if the insurance company decides to insure, it may decide to increase the premium to insure.
Fourth, the CLUE Report.
When a buyer tries to get insurance on the house, the insurer will pull a CLUE report.
CLUE stands for Comprehensive Loss Underwriting Exchange (CLUE). The report details a seven-year period of personal auto and property claims. Insurance companies use CLUE reports in the underwriting process and to determine premiums. The report includes the insured's personal information, policy number, type and date of loss, claim status, amount paid, and insured property information.
If the seller has not disclosed insurance claims, this is where the buyer will find out the truth. If the buyer gets the report before closing, it could kill the deal. If after closing, it could be grounds for a lawsuit. (Only owners and insurance agents can request the CLUE report.)
Remember the mantra: Disclose, disclose, disclose.
Sellers often are apprehensive about revealing problems that could potentially discourage buyers from making an offer. Remember the mantra: Disclose, disclose, disclose.
An inspector will likely find the issues anyway. The seller has then lost the buyer’s trust and lost the high ground in negotiating the repair. Or worse.
Buyer love letters are a tactic used by some buyers in an attempt to stand out to a seller, especially in hot markets with low inventory and bidding wars. Seemingly harmless, these letters actually raise fair housing concerns, and could open real estate professionals and their clients to fair housing violations.
To entice a seller to choose their offer, buyers sometimes write “love letters” to describe the many reasons why the seller should “pick them.” While this may seem harmless, these letters can actually pose fair housing risks because they often contain personal information and reveal characteristics of the buyer, such as race, religion, or familial status, which could then be used, knowingly or through unconscious bias, as an unlawful basis for a seller’s decision to accept or reject an offer.
Consider where a potential buyer writes to the seller that they can picture their children running down the stairs on Christmas morning for years to come in the house. This statement not only reveals the potential buyer’s familial status, but also their religion, both of which are protected characteristics under fair housing laws. Using protected characteristics as a basis to accept or reject an offer, as opposed to price and terms, would violate the Fair Housing Act.
If a letter is sent to the seller, it should never include pictures of the buyer or the buyer’s family. What can be done in a letter is write about the property itself or its characteristics. For example, “We love the house’s exterior and the garden and would take good care of it.” It is best, however, not to send a letter at all.
Best practices to protect yourselves and your clients from fair housing liability:
Source: National Association of Realtors
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