Legal ramifications of selling house with zoning compliance issues?

**justasking** · 11-04-2010, 01:06 PM

A home in my neighborhood is being listed by the agent as having X number of square feet to include a detached accessory building that has been converted to additional living space. Kitchen, full bath, bedroom, living room, heat and AC. The selling price also reflects the additional living space based on similar homes in the area and 2008 re-evaluation.

Basically two separate houses on the same 1/3 acre lot. This is totally illegal in my town.

Trying to get some action from the zoning officials but I question the ethics of the listing agent (local office of a major and well known national firm).

What are their obligations as far as knowing the zoning in the town for the home they are listing and can they be held legally liable for listing/selling a home that does not comply with zoning codes... in this case by a wide margin.

No question it is not legal and they have to know that.

**Greg** · 11-06-2010, 11:23 AM

They are obligated to know these things but their legal liability will only surface if the buyer fis damaged by the agents actions and files a lawsuit. The damages will come if your complaints force the new buyer to remove the extra living area.

If the agent discloses the situation to the buyer upfront, then the agent will have no liability. Just because you do not see this disclosure in the advertising does not mean it is not being disclosed. I have a similar property listed and every legitimate buyer learns about the problem up front but the disclosure is not available in the advertising.

It is possible the person who buys it needs this extra living space for a family member and does not care if it is illegal. They might only care if your complaints bring some action by the local authorities and the new buyer has to remove the living space.

**justasking** · 11-08-2010, 06:32 AM

Greg:

Thanks for your honesty but I'd like to take this further if you care to play along with me on this.

Originally Posted by Greg

I have a similar property listed and every legitimate buyer learns about the problem up front but the disclosure is not available in the advertising.

Same in this case but not disclosing the problem in the ad means someone is hiding something, correct? Perhaps, as the listing agent with years of experience, you can explain your reasoning for taking on a property such as this.

Originally Posted by Greg

They are obligated to know these things but their legal liability will only surface if the buyer is damaged by the agents actions and files a lawsuit.

The homeowner has made renovations or improvements and has not, I assume, taken out the proper permits or sought a variance for their actions. Now you are listing the property for way more than the house has been assessed for for some 15 years. All this for 6% commission and risk of a law suit should the town finally wake up and make the new owners tow the line.

I cannot see how telling them the house is illegal limits your liability. Your have profited by the larger commission, correct? It would seem you can be held equally culpable for your actions. In any case you will be hauled into court and have to defend yourself. Who will pay for that... you or your agency... and does your agency condone such conduct? Does your state's Real Estate Board?

Originally Posted by Greg

It is possible the person who buys it needs this extra living space for a family member and does not care if it is illegal... I have a similar property listed and every legitimate buyer learns about the problem up front

How legitimate can they be, I wonder. They seek two homes on one lot, which is completely illegal, and want the second one free of taxes. Whether they might need the extra dwelling does not make it right. They can purchase a larger home or even a twin condo. They can pay their fair share of the property taxes so policemen and firemen are not laid off.

**justasking** · 11-09-2010, 12:01 PM

Update:

The real estate agency has removed their "for sale" sign from the house.

They have removed all traces of the listing from their web site.

Apparently someone at town hall is doing their job : )

**justasking** · 12-07-2010, 01:29 PM

Update:

The tax assessor has issued a revised valuation for approximately 50% more than their original assessment and the building inspector is asking for permits. Unless the kitchen and living area is removed they will be fined $100/day.