Realtors Owe No Duty to Buyers to Inspect Property to Confirm or Deny Sellers' Disclosures

The South Carolina Court of Appeals in a recent opinion found that a realtor does not have the duty to inspect or investigate the physical condition of a piece of property for the purpose of confirming or denying statements made by the seller in a disclosure statement.  This case involved the sale of a piece of property by Realtor.  To complete the sale of the property, Sellers completed a disclosure statement.  While the disclosure statement stated “yes” to the questions regarding water seepage, leakage, dampness, and designation on a flood plain, the Sellers explained that actions had been taken to address these items.  After the sale was complete and the Buyer moved into the property, two days of rain resulted in water intrusion into the property.  As a result of the water intrusion, Buyers filed this action against Sellers and Realtor.  Realtor filed a motion to dismiss and the Greenville County Court of Common Pleas found that the Realtor owed no duty to Buyers and dismissed the action. 

Buyers appealed asserting that the trial court erred in finding that the Realtor owed them no duty.  The Court of Appeals found that S.C. Code Ann. §§ 27-50-80 and 27-50-70 taken together provide “that a real estate licensee does not have a duty to inspect or investigate the physical condition of a piece of property for the purpose of confirming or denying statements made by a seller in a disclosure statement.”  Thus, the Realtor owed them no duty.  Further, the Court stated that a real estate licensee is not liable if a disclosure is false, incomplete or misleading unless the licensee knew or had reasonable cause to suspect that the information was false, incomplete, or misleading.  The Court found that the Realtor did not have this requisite knowledge or reasonable cause.  The Court of Appeals affirmed the trial court’s decision.

Chastain v. Hiltabidle, C. Dan Joyner Co., Inc., Opinion No. 4487 (Ct. App. Jan. 22, 2009)