Agent Under no Obligation to Report Bad Roof to Department
Question: I purchased my home in Queen Creek from an investor last summer. There was no disclosure of roof problems. Two months later, I had several major roof leaks. When I contacted a local roofer to make roof repairs, he said that the real estate agent that represented the investor had contacted him a year ago to make roof repairs. After he gave the real estate agent an estimate of $2,800, the real estate agent said that was too much money and that the investor decided not to do the repairs. The roofer gave me a copy of the written estimate of $2,800 with the real estate agent’s name on it.
When I confronted the real estate agent with the roofer’s written estimate, she admitted that she knew about the roof problems that were never repaired. She said that she needed the commission on the sale of the home, and that she didn’t disclose the requirement for roof repairs because she was afraid that the sale of the home would be too difficult. The real estate agent is now willing to pay me $2,800 for a written release of any claims by me. In this written release, however, I am not allowed to file a complaint against her with the Arizona Department of Real Estate (“ADRE”). Aren’t I required to report this bad conduct of the real estate agent to the ADRE? Doesn’t she have to self-report her bad conduct to the ADRE anyhow?
Answer: First, you have no legal obligation to report this fraudulent nondisclosure of roof repairs to the ADRE. Similarly, if you see a crime like a burglary being committed, or a person injured in an auto accident, you have no legal obligation to call the police or an ambulance. Second, the real estate agent does not have to self-report this claim; she is only required to report to the ADRE any judgment involving fraud or dishonesty, or relating to her real estate practice. The settlement agreement would help the agent in two ways, she would not have your complaint for fraudulent nondisclosure on her record, and it would eliminate the possibility of the agent receiving a judgment against her which would then have to be self-reported.
Note: Before you settle for $2,800, however, I would suggest that you get at least two other estimates for the cost of repairs to your roof, and also for the cost to repair any damage caused by the roof leaks, e.g., replacement of drywall.