Legal Quiz: Top Ten Questions (November 2021)
BY WILL MARTIN, GENERAL COUNSEL
In commemoration of the 100th anniversary of NC REALTORS®, I wrote this article to reflect the top ten questions I’ve fielded through the Legal Hotline during my twenty-five years at NC REALTORS®. It was a really hard thing to do—so many questions! What I’ve done is list the most common categories of questions I’ve gotten over the years (in no particular order of importance), pose a question representative of each category, and identify two or three relevant Legal Q&As, which can be found on the NC REALTORS® website. Just for fun and as a nod to history, I’ve included an eleventh category of questions that I used to get all the time, but don’t get any more.
CATEGORY #1: Buyer’s right to refund for misrepresentation/omission of material fact
(This type of question has been around a long time, but is coming up more now due to the size of due diligence fees that are being paid.)
QUESTION: Does a buyer have the right to a refund of their Due Diligence Fee if the property is misrepresented by the listing agent or seller?
CATEGORY #2: Has a binding contract been formed?
(This category of questions is as old as dirt.)
QUESTION: Buyer agent submits signed written offer on Form 2-T to the listing agent. After communicating with the seller, listing agent texts buyer agent to inform her that the offer is acceptable to the seller and that as soon as the seller sign it he will email her a signed copy. If the listing agent later notifies buyer agent that the seller has decided to accept an offer from a second buyer, may the first buyer claim that there is a binding contract between the seller and the first buyer?
CATEGORY #3: Assistance animals
(This one made the list due to the dramatic increase in frequency of questions in this category in the past several years.)
QUESTION: Is a landlord who has a “no pets” policy required to let a tenant keep a dog or other domestic animal on the property for emotional support?
CATEGORY #4: Buyer or seller switching firms
(I’ve handled a steady stream of questions in this category for many years.)
QUESTION: Can a buyer fire their buyer agent without cause and hire a new firm to represent them if the first firm won’t agree to terminate the buyer agency agreement?
CATEGORY #5: Fixtures and personal property
(This category, which warrants two questions, probably came over on the Mayflower.)
a. QUESTION: Is a free-standing refrigerator included as part of the sale if it’s advertised in MLS but not identified in the Offer to Purchase and Contract?
b. QUESTION: Is a utility building that is not on a permanent foundation included as a part of the sale if it’s not listed as an exception in the Offer to Purchase and Contract?
CATEGORY #6: Advertising another broker’s listing
(Not a new category of questions, but there’s been a sharp increase in their number, undoubtedly fueled by the popularity of social media.)
QUESTION: May a REALTOR® include another firm’s listing in her print or social media advertising without the other firm’s consent so long as the other firm is identified?
CATEGORY #7: Handling multiple offers
(This category of questions has been around a long time; their frequency ebbs and flows depending on how hot the market is.)
QUESTION: If asked by a buyer agent if there are other offers, the listing agent is ethically obligated to always disclose the existence of other offers. True or false?
CATEGORY #8: Negotiating repairs
(Although the particular questions have changed due to the introduction of the “due diligence contract” in 2011, this category has been a popular source of questions during my entire 25 years as NC REALTORS® General Counsel.)
QUESTION: So long as a buyer agent submits requested repairs prior to the 5 PM deadline on the last day of the Due Diligence Period, the buyer will be able to get their earnest money deposit back if the Due Diligence Period ends and the seller hasn’t agreed to the requested repairs. True or false?
CATEGORY #9: Disbursement of earnest money
(An oldie-but-goodie category that can always be counted on for hotline questions.)
QUESTION: Can a real estate firm acting as escrow agent disburse an earnest money deposit to the buyer without the seller’s written consent if the buyer terminates the contract during the Due Diligence Period?
CATEGORY #10: Listing and selling property of a recently deceased owner
(Owners have been dying regularly since the dawn of the private ownership of land, but for reasons unknown to me the number of hotline questions on how to list and sell the property of a recently deceased owner has been steadily increasing for several years)
QUESTION: I am taking a listing on property where the owner, Jack Smith, recently died. A broker buddy told me that I should list the property in the name of “Estate of Jack Smith.”
BONUS | CATEGORY #11: Disputes about whether an item is performing the function for which intended and is not in need of immediate repair
(I’d like to have a dollar for every question I’ve gotten that fell into this category, or that related to any of the many conditions and contingencies that were contained in the pre-2011 version of the Offer to Purchase and Contract. Remember? In addition to the condition that a long list of items were performing the function for which intended and not in need of immediate repair, there was a loan contingency, an appraisal contingency, a wood-destroying insect condition, a radon condition, a cost-of-repair contingency, and a flood hazard condition, and there were deadlines associated with many of those conditions and contingencies!)
(NOTE: The following question appeared in a Forms Forum article in the February 2006 issue of Insight magazine.)
QUESTION: If a seller refuses to replace a retaining wall that the buyer’s structural engineer says was improperly constructed and will need to be replaced in no more than five years, may the buyer terminate the contract and receive a refund of her EMD, or may the seller keep the EMD if the buyer refuses to close?
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