Expert: Todd C. Menard - 12/5/2008

Question
QUESTION: Neighbor bought house 6 years ago. He was not properly informed about a creek running through his property that goes under other neighbors' driveway via a 36 inch pipe.  If pipe and retention pond are not regularly cleaned out (cost $1000 each time), creek floods massively and has caused driveway washout etc , costing $6000-$8000 twice in last 6 years in collateral damage to neighbors properties. I have copies of invoices for pipe maintenance, cost of driveway reconstruction and video of major flood which occurred 3 years ago.  He is now planning to sell house and I fear he will not disclose these hidden costs to prospective buyers.  What can I legally do to alert potential buyers or prevent a disclosure fraud.

ANSWER: Hello Richard - In AZ, seller disclosure is a mandatory requirement promoting the disclosure of known latent defects, repairs, maintenance, etc. Obviously, the this situation would be considered a pertinent fact requiring disclosure as it may reasonably affect the consideration paid for the property. To protect yourself from your own exposure and possible liability/damages to the seller, even though you have valid proof of the issue, you should refrain from interfering with any prospective buyers. On the other hand, the listing agent would be required to disclose it as a matter of obligation, if not state law, once they were made aware of it as set forth in the tenets of the National Association of REALTORS Code of Ethics (which can be found on realtor.com). If you suspect any wrong doing the next point of contact would be the owner/Designated Broker of the listing company. Of course, if the property is listed For-sale-by-owner (FSBO) then the above would not apply, although the seller would still remain liable for failing to disclose a KNOWN pertinent or latent fact that may have affected the consideration paid for the home, or the decision to purchase. The buyer typically has up to 180 post closing or 180 days from the time an individual utilizing reasonable diligence should have known about the situation. So, once the sale is complete (or if you should be contacted by the potential buyer anytime) and you are welcoming your new neighbors to the community you could raise the knowledge of this situation. If it is post closing and they act with reasonable diligence once the fact is known (quickly) the seller may have additional liability and exposure to the situation. Pick you time as you deem appropriate, but be cautious not to 'interfere' with the transaction. Providing information and interfering may be differentiated by whether it were you or the buyer whom initiated the communication which led to the discovery of the fact. Remember, I am not an attorney, so this is not to be considered legal advice, rather this is to be considered real estate information that any professional REALTOR should be able to provide. If you want to get involved... seek legal assistance before beginning any efforts. Hope this helps. - Todd

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QUESTION: Great answer... thanks so much.  Could you advise me on the legality of my putting up a sign on my property warning that drivers use the driveway at their own risk.  Can it protect me from liability should someone be hurt while driving over driveway damaged by flooding/icing up

Answer
Hello Richard - There are two issues with regard to your question... the first is the right to install the sign and second, the potential for risk reduction by noticing the user of the right of way. This, as worded is a liability and exposure to litigation question which does not fall under the realm of real estate advice, and since I am not an attorney I would be providing advice outside the area of my expertise, sorry. If you feel uncomfortable or that there may be a possible litigious exposure I would validate your feelings and suggest discussing risk reduction techniques while on the phone with the attorney requesting an answer to the initial question. Sometimes in this crazy world once you are aware of a situation it requires you seek legal advice or pay the penalty for failing to down the road. Usually initial attorney advice is free. Thank you. If you have any additional real estate related questions please send them along! Take care - Todd