Money Down the Drain

Broken Pipe

As a real estate agent, your best bet is to make certain that you disclose anything regarding the property that you have knowledge of, whether it is good or bad. In the long run, this will make sure that a successful sell remains one even after the final signature has been processed and all papers are filed. Not informing potential buyers of an issue on the property you are selling could create a messy situation later.

The Facts

The Levertons had recently bought a property in a Chicago neighborhood from Belvedere City Realty. The agency represented the Levertons, as well as the seller of the property, Mr. Clark.1

A few months later, the Leverton’s neighbor, Mrs. Bloom, began experiencing water drainage issues on her property. Mrs. Bloom knew that there was a drainage line that went across the Leverton’s property to drain runoff from the ditch located on her property. She had an agreement with the original owner, Mr. Clark, that allowed this. However, this agreement was not done in writing or passed on to the Levertons when they purchased the property.2

It was discovered that the water was not draining on Mrs. Blooms property due to a break in the pipe on the Leverton’s property when it was run over by a delivery truck. After the incident the Levertons did not wish to pay for a new drain pipe to be placed on their property.

Mrs. Bloom filed a claim against Belvedere City Realty alleging that the real estate agent and Mr. Clark did not disclose to the Levertons that there was a drainage pipe on their property that led to the ditch on her property.


The Result

Since the Levertons were not aware of the agreement between Mr. Clark and Mrs. Bloom, and did not wish to replace the pipe, Mrs. Bloom sued Belvedere City Realty. Mrs. Bloom asked to have the pipe replaced and felt it was Belvedere City Realty’s responsibility to disclose to the Levertons that water drainage could become an issue should something happen to the pipe on their property.

The case went into mediation and Belvedere City Realty agreed to pay $12,000 in order to get the drainage pipe fixed or replaced. If the agent had informed the Levertons that their property had a drainage pipe across it, the situation with the broken pipe may have been avoided.

Risk Factors

Risk Factor #1
Two agents from the same office are representing both the buyer and seller of this property.

Risk Factor #2
The agreement regarding the drainage pipe between the seller and their neighbor was not in writing, therefore, there was nothing to show to the buyer.

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