Are Realtors obligated to disclose mold problems in a foreclosure? The short answer is yes, but unfortunately things aren't always done as they "should" be.
Why Should It Be Disclosed?
A mold problem in a home falls into the category of "Material Defect". In the state of Maryland, any Material Defects that are known by the seller or listing agent must be disclosed, regardless of the Annotated Code of Maryland, Real Property Article, Section 10-702. The catch is that the seller must have knowledge of the defect.
Banks Don't Disclose
Banks typically avoid making any sort of disclosure, and rather sign a disclaimer stating they have know knowledge of the property and it's potential defects. Since the bank has probably never actually visited the property, how can they know there is a mold issue?
Banks Should Disclose
It stands to reason, however, that someone involved in selling the property (such as the Realtor who lists the property) has seen and is aware of a possible mold problem. If there is a latent defect such as this, and it is known, then it is the responsibility of the listing agent and the owner (The Bank) to disclose such problems. What should happen, and what does happen, however, can be two entirely different things.
Are they Trying to Hide It?
With the massive mold growths I've seen in so many foreclosures, it's impossible to hide the fact in many cases. the concern that I, as a Realtor, have is that there is a potential health risk involved in showing these properties. It's a weekly occurence now: I go out, show a dozen or so moldy foreclosures, and go home with a splitting headache and nausea. At it's core, this is a health risk, for both me and my clients.
The concern many banks have is that mold stigmatizes a property (DUH!) and reduces it's value. Their risk of exposure to a lawsuit is minimal (You gotta prove they knew the home had mold), and so the less they say, the better, at least in their mind. In the mean time, myself and my clients get to deal with the headaches, nausea, dizziness, and shortness of breath that goes along with heavy mold exposure. Lucky Us.
~Jonathan Benya- Realtor
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000 - office
301-653-8116 - cell
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a good realtor/ seller should be responsible enough to disclose all the property's characteristics and its really unfair for the buyers to discover it and its too late for them to complain.
Posted by: Jim of Sun City | October 30, 2009 at 02:15 AM
Yes, there is a problem with this disclosure in regards to foreclosures. We see the same thing here in Myrtle Beach. I can't understand Realtor's and sellers who stoop so low as to hide things. They would be the very first to scream if the shoe was on the other foot.
Posted by: Murrells Inlet Real Estate | October 30, 2009 at 04:48 PM