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Real Estate Consumer's Agency and Disclosure Act

Rosenthal v. JRHBW Realty, Inc., [Ms. 1180718, Feb. 28, 2020] __ So. 3d __ (Ala. 2020). The Court (Mendheim, J.; Parker, C.J., and Bolin, Shaw, Bryan, Sellers, and Stewart, JJ., concur; Mitchell, J., concurs in the result; Wise, J., recuses) affirms the Jefferson Circuit Court’s summary judgment in favor of JRHBW Realty, Inc. and agent Charles Valekis in an action by Rosenthal alleging claims of breach of contract and negligence/wantonness arising from the purchase of a used residence.

In an effort to avoid “as-is” provisions in the sales contract and provisions in the agency agreement placing upon Rosenthal responsibility for inspecting the home, Rosenthal argued that prior to the execution of the agency agreement Valekis voluntarily undertook a duty to have the home inspected by a structural engineer. Ms. *16. Construing § 34-27-82(b), Ala. Code 1975 (Real Estate Consumer’s Agency and Disclosure Act, “RECAD”), the Court held that Valekis was acting as a transaction broker at the time he allegedly voluntarily undertook to retain a structural engineer to evaluate the foundation of the home. § 34-27-82(f) of RECAD provides that “‘[w]hen serving as a transaction broker, the duties of the licensee to all the parties to a real estate transaction are limited to those which are enumerated in § 34-27-84.’” Ms. *29 (emphasis added). Because § 34-27-84 does not list a duty to inspect a property or procure any specific type of professional to inspect the property, § 34-27-87 precluded the home buyer’s effort to establish that Valekis assumed a common law duty. Ms. *29-30.

The Court also noted that assuming, arguendo, that Valekis was not a transaction broker, the home owner failed to cite “a single statute or case that imposed on Valekis a voluntary duty to perform a house inspection or to retain a structural engineer outside an agency relationship.” Ms. *32.

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