Agent Fails to Protect Client about Lack of Potable Water
In this case, an agent failed to protect his clients and was assessed a $10,000.00 fine and the brokerage with whom he was affiliated a $5,000.00 fine for failing to supervise him.
These are some of the essential facts:
• The Offer was conditional only on home inspection.
• The information on the MLS system disclosed that the Property had a well as water supply system and it also had a septic tank.
• The agent did not insert into the Offer conditions for quantity or quality of water or with respect to the condition of the septic tank system.
• Neither the agent nor the brokerage advised the Buyers:
- That they should insert a clause in their Offer, requesting for a potability test of the well water be done
- Of the importance of conducting a flow test to determine that the well supplied adequate water for the Property
- To request or require the Seller to produce the well certificate, and
- Have the Seller produce information in relation to the septic system.
• An Order to remedy an unsafe building (related to the safety of the water) was issued by the municipality the previous year.
Get the tests done! Don’t rely on a home inspection clause. That has nothing to do with the quality or quantity of the water. In this case, the buyer opted not to proceed with the home inspection, so the condition was waived and the transaction proceeded. This was no way to protect the client.
On inquiry, one would have found that the homeowner had been ordered to comply. The water was indeed “unsafe”.
It’s an extremely important issue in all real estate transactions dealing with rural properties!
Brian Madigan LL.B., Broker BRMadigan@iSourceRealEstate.com