real estate

Must seller disclose pedophile neighbor?

Steve McLindenDear Real Estate Adviser,
Do I as a seller have the responsibility to tell a family with two very young children that a pedophile lives across the street? He also holds meetings at his home for other abusers who have been "cured."
-- Viv

Dear Viv,
Legally, no. But there's that pesky ethical and moral issue: If you couldn't live with yourself if something horrible happened to the buyer's kids, due to the offender or his consorts, how much solace would that faster or more lucrative sale give you?

Woman peering through window blinds © auremar/Shutterstock.com

It's an unfair situation

That's the terrible spot that you and many other homeowners are in, and I cringe at the thought of your dilemma. Yes, it's not fair that your investment and freedom to time your next home purchase should be put in jeopardy by your unfortunate proximity to this person. Even if you had performed a sex-offender search as I always suggest for a homebuyer before closing, this man and his meetings could have simply moved onto your block after you were already there.

Your legal obligation is limited

That aside, you're likely in the clear to sell legally without making that disclosure except in a few states with somewhat ambiguous laws, including California, where sellers are expected to disclose when equity, justice and fair dealing demand disclosure. In a landmark Arizona case based on a scenario such as yours, homebuyers with small children sued sellers and their agent for nondisclosure, breach of fiduciary duty and fraud for not mentioning a neighboring pedophile. But because the buyers had signed a seller's disclosure statement saying "buyer acknowledges that by law, sellers, lessors and brokers are not obligated to disclose that the property (is or has been) located in the vicinity of a sex offender," they lost. Such language in disclosure statements is much more common now than a decade ago.

You have a right to remain silent

While you may not be forced to disclose this, you and your agent absolutely cannot lie when responding to direct questions from the buyer regarding offenders or other criminals, though you technically aren't obliged to answer. In fact, agents and sellers have taken in recent years to saying something to the effect that they're "not obligated by law to respond to such questions, though if that information is important, the buyer should research it or hire a professional to do so." The National Association of Realtors even tells agents that the burden of sex offender research falls on the prospective buyer, not the agent, unless required by law.

Your agent must protect your interest

One often overlooked issue in this debate is the fact that your agent has a fiduciary responsibility to exclusively protect your interests, providing they are legal. If you say "don't disclose" in this case, your agent must follow that directive, no matter how queasy that makes her or him feel. Many agents -- often with young children themselves -- have surrendered listings over this issue.

Maybe find another buyer

This is a very tough call, though buyers with kids would say it's an easy one. Caveat emptor or not, if not disclosing would weigh on your conscience, it might behoove you to wait until a more fitting buyer enters the picture. That's easy for me and others to say. Certainly, you are narrowing your buying universe considerably that way.

I don't envy your decision. Good luck!

Ask the adviser

To ask a question of the Real Estate Adviser, go to the "Ask the Experts" page and select "Buying, selling a home" as the topic. Read more Real Estate Adviser columns and more stories about real estate.

Bankrate's content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrate's Terms of Use.

advertisement

Show Bankrate's community sharing policy
          Connect with us
advertisement
MORTGAGE & REAL ESTATE NEWSLETTER

Timely market news and advice for consumers ready to buy, sell or invest in real estate. Delivered weekly.

Blog

Holden Lewis

Who is homeownership for?

The homeownership rate fell to its lowest point in more than 20 years in the final quarter of 2014.  ... Read more

advertisement
Partner Center
advertisement

Connect with us