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socrateaser
socrateaser, Attorney
Category: Business Law
Satisfied Customers: 38442
Experience:  Retired (mostly)
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Does a Licensed Realtor/ RPA (Real Property Administrator –

Resolved Question:

Does a Licensed Realtor/ RPA (Real Property Administrator – commercial leases), Senior Property Manager & Leasing Director have a Duty to Disclose material facts - regarding the premises & the abandoned Fixtures, Furniture & Equipment (FF&E) - sold to me in a COMMERCIAL Lease ? The Landlord was granted (in part) a Summary Judgment that she had NO "Duty to Disclose" the actual non-operable condition of the FF&E she sold to me & my family... We strongly disagree with this decision, however the Judge also denied (in part) their Summary Judgment claims that there was insufficient grounds for our Counterclaims regarding their Misrepresentation, Unfair & Deceptive Trade Practices & Unjust Enrichment... should we be concerned that the Judge agreed that the landlord had NO Duty to Disclose ??
Submitted: 5 years ago.
Category: Business Law
Expert:  socrateaser replied 5 years ago.
Hawaii law only recognizes a duty to disclose to the client. Unless the real estate professional was acting in a dual representative capacity (of both landlord and tenant) then there is no duty to disclose. See Property House Inc. v. Kelley, 715 P.2d 805, 68 Haw. 371 (Haw. 03/13/1986).

However, this doesn't mean that there is no obligation to avoid active concealment of material facts that if known to the tenant would have caused the tenant to not enter into, or materially modify, the contract. That failure to disclose would be a fraud -- which is what the court is distinguishing -- i.e., there is an agent's duty to affirmatively disclose all material facts, no matter what sort of affect it may have on the client. Whereas the duty to avoid active concealment is owed by every contracting party to the counterparty.

It's somewhat splitting hairs, but it boils down to whether or not the agent knew of some defect and kept silent, as opposed to not being certain of a defect, and simply ignoring the possibility.

Hope this helps.


And, if you need to contact me again, please put my user id on the title line of your question (“ToCustomerrdquo;), and the system will send me an alert. Thanks!

Customer: replied 5 years ago.
Thank you - and for certain we would NOT have entered into the lease for the premises - and purchased the FF&E for a supposed "turn-key" operation - if we had known the equip could not be operated for its intended purpose & would require significant repairs - and we did NOT have an agent... so, if we CAN procede with our Counterclaims as to Misrep/ Unfair Trade Practices/ Unjust Enrichment - is there any right we should preserve/ motion (to clarify the Court Orders, etc?)/ etc. so that the landlord can't use the fact that they were granted their claim that they had "No Duty to Disclose" as we were "negotiating as businessmen" and as such, we had "equal bargaining power" ?? We are relying on the Consumer Potection Act for our Counterclaims, and don't want anything to prevent us from being regarded as consumers...
Expert:  socrateaser replied 5 years ago.
The denial of summary judgment shows that you still have a claim. There's no legal action that you can take to somehow improve that outcome, short of bringing a motion for summary judgment yourself and trying to prove that the defendant committed a misrerpesentation or active concealment.

Hope this helps.


And, if you need to contact me again, please put my user id on the title line of your question (“ToCustomerrdquo;), and the system will send me an alert. Thanks!

socrateaser and 4 other Business Law Specialists are ready to help you
Customer: replied 5 years ago.
OK, thanks again

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