Wolcott, CT asked in Real Estate Law for Maryland

Q: Can I hold a buyers agent liable for fraud in Maryland real estate transaction?

I sold home in Md in May 2019. Buyer agent fraudulently advised buyer to get out of contract using HOA Docs disclosure law when there was no buyer complaint with docs. Buyer home inspection showed serviceable roof with 3 minor issues. Buyer requests roof replacement. I refused and said would fully repair as required under law. Agent advises buyer to falsely state disagreement with hoa docs and submits addendum claiming same to cancel contract. I begrudgingly sign addendum, refund deposit in full and relist property. Buyer comes back 3 weeks later submits new offer $50k less and signs off on hoa doc acceptance and no homeowner inspection as part of offer submission. In negotiation buyer agent fired buyers and buyers state they had no problem with hoa docs in previous contract but agent had advised buyer to sign rejecting hoa docs in order to get out of previous contract. House closes $50k less than original contract. Can I show agent committed fraud, unethical conduct?

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2 Lawyer Answers
Thomas C. Valkenet
Thomas C. Valkenet
Answered
  • Baltimore, MD
  • Licensed in Maryland

A: The HOA contingency operates regardless of intention. But having accepted a new deal, and closed on that new deal, you are likely estopped from claiming any damages against the purchaser and the former agent. The HOA contingency is a well-known "out" to a contract.

Richard Sternberg
Richard Sternberg
Answered
  • Potomac, MD
  • Licensed in Maryland

A: Perhaps there is some other irregularity that would be revealed by a legal review of the transaction, but I agree entirely with my learned colleague, Mr. Valkenet. If the law provides a basis for voiding a contract, it doesn't matter why it is used. The correct method to minimize the impact is to deliver the HOA package prior to accepting an offer. That avoids the nearly inevitable buyer's remorse. Further, your signature on the revised contract would seem to be a complete novation and release. Finally, to add to Mr. Valkenet's response, you are not in privity with the buyer's broker. The buyer's agent has very limited duties to you. The duty is to his client.

Anthony M. Avery agrees with this answer

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