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Legal Hotline Attorney Vern Jarboe answers frequently asked questions from Kansas REALTORS® about their transactions.
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Foreclosures - Lead Based Paint Disclosure
QUESTION: You asked whether the form acknowledging that the lead based paint disclosure needed to be signed when the sale involves a foreclosed property.
ANSWER: The Lead Based Paint Disclosure Act excludes properties which have been foreclosed from the disclosure requirements of the Act. Accordingly, it would seem unnecessary to have the seller sign off on the form concerning whether the disclosure has been made.
Agency - Commission Split
QUESTION: You asked about a situation where you had a property listed. A buyer entered into a contract to buy the property. She could not close on the purchase until she completed her divorce. The seller, however, allowed her to move into the property which the buyer is now leasing. The listing agreement has run, as well as the contract to purchase. The buyer still intends to purchase the property but the seller is contending that you are not entitled to a commission.
ANSWER: Even though you have no current agreement with the seller, you were the procuring agent in this case and you would be entitled to a commission based on quantum meruit.
Disclosure - Client Information
QUESTION: You asked about a situation where you represented a seller. The transaction closed approximately a year ago. The buyer, who is an attorney, is now calling you for information about the seller. It appears there was a problem with the siding on the house and that the siding company paid some settlement to the original sellers which the sellers used to paint the house, but did not repair the siding. The sellers did not disclose the siding problem on the disclosure. You were unaware at the time about the siding issue, but have since learned about it because every house in the neighborhood has the same problem. The buyer wants information as to the location of the former owner.
ANSWER: You do not have to disclose this information, although the buyer could obtain your files through a subpoena. It is probably best to have your attorney deal with the buyer.
Miscellaneous - Illegal Lottery
QUESTION: You asked whether it was legal to have a raffle where a person, for $50, would be offered a chance to win a house.
ANSWER: This would be considered an illegal lottery in Kansas. Generally, to have a raffle, you cannot set a price. You can only ask for a free will donation and, if a person does not want to pay any money, they should still be given a chance to win the house if they request that. To set a specific price that everybody pays for a chance to win the prize is considered an illegal lottery under the Kansas Constitution. If you're going to do some kind of raffle, you should consult with your attorney to make sure there is no violation of the Kansas lottery law.
Miscellaneous - Door-to-Door Sales Law
QUESTION: You have a question about an inquiry concerning application of the Kansas Door-To-Door Sales Law. Basically, Kansas has a law which allows consumers to back out of an agreement where the agreement is signed in their home as opposed to in the place of business with the service provider. An attorney has suggested that this right of rescission then extends to real estate listing and buyer agency agreements.
ANSWER: I believe the door-to-door sales law specifically excludes real estate transactions and is therefore inapplicable. On that basis, the attorney's position would appear to be an error, but releasing an unhappy consumer may be a better choice.
Contract - Short Sale
QUESTION: You have a situation where the need for a short sale has arisen only after you were in a contract. However, the relocation company that is involved may make up some of the difference with their payments.
ANSWER: I believe you risk an allegation of fraud on a lender if you do not fully advise the short sale lender of these circumstances.
