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JD, Lawyer
Category: Real Estate Law
Satisfied Customers: 1335
Experience:  Over 11 years litigation experience including eminent domain and real estate disputes
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Do I have to disclose an erroneous claim by a neighbor on a

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Do I have to disclose an erroneous claim by a neighbor on a residential disclosure statement? The next door neighbor is 5 feet below me and I have French drains on my property. There is a a 5 foot retaining wall between the two properties. All of my gutters are connected to the french drain system and this system was installed in 2001. The neighbor has not raised an issue to me about anything since this time. The day before closing the neighbor contacted the buyers agent and makes erroneous claims that I'm diverting water onto his property by virtue of being uphill. The buyer subsequently gets cold feet, doesn't show up for the closing the next day, cancels the contract and want his earnest money back. Contract is cancelled by buyer 18 days past the date the contract says he can cancel.

All inspections were done and passed. French drains were disclosed on the disclosure statement and drainage specialists even said that I'm not diverting water on to my neighbors property as claimed. The guy is downhill and gets water from three sides of his property.


Your neighbor needs to be sued for tortious interference. When you maliciously interfere with a contractual agreement in this manner you become liable for the resulting damages. You should contact a local attorney immediately and file the lawsuit. You should not tolerate this for one more second.


The next issue is as to the buyer. Who can really blame the buyer here for getting cold feet when it suddenly appeared they were buying in to a property drainage dispute. Obviously the contract may still be enforceable but I think I would start by putting pressure on the neighbor. Once sufficient focus is applied to the malicious wrongdoing of the neighbor, your attorney may advise you that the contract should now be enforced. Real estate contracts have numerous contingencies but I know of none that involve being called by a neighbor. You may simply need to sue for breach if it becomes necessary.


Please reply if I can help further.



Customer: replied 7 years ago.
One thing to add, the neighbor is a real estate agent and used her position in realty to look up my disclosure statement on her companies MLS system for agents, and this was how she obtained the buyer's agents contact info - phone and email. Because she did this, could her real estate firm also be liable and thus be a party to any Tortious interference claim?

The buyer's exposure is $5000 earnest money and while I feel he has breached the contract, his loss is limited to the earnest money, correct?

The buyer's liability may exceed the earnest money if the contract did not spell out the liquidated damages provision OR if the buyer refuses to release the earnest money in case of their breach... thus nullifying the liquidated damages provision. This is something your attorney will want to review carefully. I wouldn't limit anything at this point including further monetary damages or even specific performance (forcing to perform under the contractual terms). Again, your attorney will want to review the contract carefully and evaluate any provisions that may be challenged.


As for the real estate agency that employs your neighbor, I doubt you would be able to show that she was acting within the course and scope of her employment to hook the company for liability. It is something you would want to evaluate, but I doubt it materializes. It is much more likely that she abused her position and access to gain information that she had no business gaining... this could also result in some sort of licensure issue for her.


Please reply if I can help further.



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