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March 2015
Welcome to this month's edition of the McManamy McLeod Heller, LLC monthly newsletter. Each month we share important information for the serious real estate professional. You can rely on MMH to update you on current changes in real estate law that will impact your business and to offer you practical ideas on how to provide your clients with the best customer service in town.
The Importance Of Understanding
Megan's Law in Georgia
Most real estate agents are aware of the clause in the GAR Purchase and Sale Agreement which places the responsibility on the Buyer to inspect the neighborhood, including the possibility of a registered sex offender residing nearby. However, rather than relying on this clause in the contract to mitigate potential issues, real estate agents should actively encourage buyers to partake in research and due diligence. More importantly, listing agents should disclose known material facts regarding neighborhood conditions, such as any known registered sex offenders. A real life situation recently occurred in a transaction wherein the seller and the seller's real estate agent were aware that a registered sex offender lived next door, but the fact was never disclosed to the buyers. The buyers learned of the neighbor's status shortly after closing, when they received written notice from the local police department, a disclosure requirement under the federal "Megan's Law". (Congress enacted a federal version of New Jersey's Megan's Law in 1996 as an additional section of the federal Violent Crime Control and Law Enforcement Act of 1994.)
In this particular transaction, the seller's real estate agent believed that disclosure was not necessary unless a potential buyer made an actual inquiry about the presence of registered sex offenders, and that the duty to inspect was a buyer obligation. The buyers sued the seller and the seller's agent, alleging failure to disclose a material fact regarding the property, intentional misrepresentation and diminished property value. In turn, the seller filed a cross claim against their agent seeking indemnification by claiming they received negligent advice regarding non-disclosure. The court ruled that the presence of a registered sex offender was a known material adverse condition for which the real estate agent did have a duty to disclose to potential buyers.Brokers and real estate agents should be familiar with the Megan's Law enacted in their state. If a potential buyer asks about the presence of a sex offender in the neighborhood and the agent is unsure, they should refer the buyer to the local agency that maintains the registry of offenders. On the other hand, if an agent has actual knowledge that a sex offender is in proximity to the subject property, they should disclose that fact and specifically cite their source of information.
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MMH Has 3 Locations to Serve Your Needs
Buckhead Location:
3520 Piedmont Road NE, Suite 110
Atlanta, Georgia 30305
Phone: 404-442-6600
Fax: 770-351-0940
Midtown Location:
621 North Ave NE Suite C100
Atlanta, Georgia 30308
Phone: 404-502-3334
Fax: 1-866-898-1099
Alpharetta Location:
11525 Haynes Bridge Rd. Suite 250
Alpharetta, Ga 30009
Phone 770-781-3000
Fax: 888-998-7373
Thank you for taking the time to read our newsletter.
Our topic next month will be issues to be aware of when adding a person to title after the closing.
We would love your input on topics for future issues. Please send your suggestions to info@mmhfirm.com.
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