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I am very sorry for your situation.Do we have an obiligation in this matter? Or just the selling agent??
I am afraid that you the firm may
be liable here. It all depends on what your real estate agent KNEW or SHOULD HAVE KNOWN when they listed the lots for sale. Allow me to explain.
To sue in a state court, one needs to have a "cause of action." There are numerous causes of action, such as "breach of contract," "negligence," "fraud," "unjust enrichment
," etc., as well as causes of action rooted in statutory law. Every state has their own although they are very similar to each other in every state.
Here, the buyers can allege - possibly - negligence
. The elements of an action for negligence are the existence of duty (the obligation to other persons to conform to a standard of care to avoid unreasonable risk of harm to them); breach of duty (conduct below the standard of care); causation (between the defendant's act or omission and the plaintiffs injuries); and damages
. Artiglio v. Corning Inc. (1998) 18 Cal.4th 604, 614, 76 Cal.Rptr.2d 479, 957 P.2d 1313.
They can allege here that your agent had a duty to know (or discover via reasonable search) that the listing had an issue, and that they failed to correct/mention that before the sale, thus making them liable. If they are the firm's employee (or a full-time contractor
which basically acts as an employee), then the firm itself may be liable under the doctrine of Respondeat Superior
. Under the doctrine of respondeat superior, an employer may be held vicariously liable for [wrongs] committed by an employee within the scope of employment. Perez v. Van Groningen & Sons, Inc. (1986) 41 Cal.3d 962, 967 [227 Cal. Rptr. 106, 719 P.2d 676].
However, just because they claim
that you are liable does not mean that you would be found as such. In the end, it is up to 12 jurors to decide who is (more) responsible, and they may decide that the selling agent had the upper duty to investigate any possibilities of error and omission in the listing before coming to (your) broker, and that your broker did not have to do a thorough check, or, only a "quick" check and not a thorough one. There is no statutory law that specifically states how an agent is liable in such a situation, so it is on a case by case basis.
In the end, the underlining question is: DID YOUR AGENT PERFORM DUE DILIGENCE? If so, then they are not responsible and by extent, neither are you. If not, then they may be held responsible, and if so, then the firm may be as well.
A firm in your situation may wish to then write back a letter stating that (1) the agent did its due diligence and thus (2) the firm is not liable and that one would defend one's self in any litigation. This may help to deter someone who is simply looking to scare you into payment with threat of litigation. Let me know if you need such a sample letter by using the REPLY button.
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