Denver, CO asked in Real Estate Law and Land Use & Zoning for Colorado

Q: What legal action can I take for misrepresentation of a newly-purchased home?

My question is regarding the purchase of our new condo. The realtor told us on two separate occasions that the fenced-in yard was shared between us and the owner next door. Last night, the renter of that unit abrasively told me that is not a shared space, it belongs to her unit only. Had we known the yard wasn't shared, we wouldn't have purchased. The realtor has been responsive and willing to help broker a deal (the unit owner reached out and wants to meet tomorrow). If we can't convince him to let us share the space in exchange for taking care of it, what, if any, legal action can we take? Our real estate agent is with Berkshire Hathaway, so I have a feeling they covered themselves despite misrepresenting that detail aloud. I'm also nervous and upset that we were duped on something that was very important to our decision process.

1 Lawyer Answer
John Roland Lund
John Roland Lund
  • Real Estate Law Lawyer
  • Carbondale, CO
  • Licensed in Colorado

A: It appears the broker is the listing broker as opposed to someone you retained specifically to represent you as the buyer? Assuming that is correct, the listing broker is not your fiduciary and not responsible for your best interests. Rather they represent the seller. They are nevertheless obliged to give you honest and accurate information about something like the boundaries of the property and the rights to share certain spaces. From what you say, this was a material aspect of the contract and you probably have a basis to drop out of the purchase and recover your earnest money if it cannot be worked out to your satisfaction. By the way, the best way to establish your rights to use the space is to have the neighboring unit owner issue an easement for that use in favor of the condo you are buying but that might be a big ask.

As for the responsibility of the broker, if he or she failed to give you honest and accurate information about the shared space, they may indeed have responsibility for problem. You might try to get them to accept a reduction in their commission that would be a credit for you in the purchase. If the sale fails and you recover your earnest money but have incurred other expenses, such as appraisals, that cannot be undone, then you could make a claim for those to be reimbursed by the broker but such claims have to be pursued under the terms of the contracts in place and those usually call for arbitration of such matters.

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