Busted for failure to disclose

Some of my fellow agents were busted for failure to provide consumers with the lead paint disclosure. As a broker, I complain about paperwork. But there are certain papers that consumers must see and understand, before going forward. If you do not see these disclosures, you are not working with an agent who respects consumer-protective laws.

Before you discuss any specific property, you should see the licensee-consumer relationship disclosure. It covers how your agent is planning to hold your confidential information. (The first discussion means the first professional discussion; if you are jawing at a party, that doesn’t count.) It is important to know who an agent represents and who other agents in the office might represent. The National Association of Realtors has shown that only about 30 to 35% of home buyers actually receive agency disclosure statements at their first meeting with a licensee. (This test by NAR in 2002. The level is virtually unchanged since it was first revealed by the FTC in their 1983 study.)

Before having your home inspection, you should know your rights regarding inspectors and their license requirements: It explains when the inspection should happen, what is covered, and how to choose an inspector.

Before signing your Offer, or a very least before your Purchase and Sales Agreement, you need to be informed about lead paint. The lead paint disclosure is the one that Coldwell Banker Residential Brokers ran afoul of. Of all the consumer forms here, this one gives the least amount of help to consumers. Lead paint is present in about 70 percent of homes in Massachusetts. A homeowner can easily spend $20,000 or more getting it safely removed. My gripe is that the disclosure has the option of “unknown.” “Unknown” just means, “untested.” I call this the "don't ask, don't tell" problem. The only benefit I see with this disclosure is that it puts the broker’s feet to the fire about handing out a copy of the law. Consumers should see the law, should read it, and can ask questions.

These disclosures were written to inform and protect consumers. However, frequently they are not presented. Or they are stuck in a packet that is never read. My advice for consumers is to really read what you are given by agents. If you don’t see the first two forms – the Licensee-Consumer Relationship Disclosure and the Home Inspectors, Facts for Consumers – early in your relationship with an agent, you should run the other way.

Consumers, have you seen these disclosures? Do you think they helped you make better decisions?