In a November decision, the Arizona Court of Appeals held that sellers and agents have no duty to report the presence of nearby sex offenders when offering a home for sale – a decision with meaning unrelated to real estate.
The case, Lerner v. BMD Realty, Inc., began when the Lerners purchased a Scottsdale home and later learned that a registered sex offender lived next door. The Lerners claimed that the previous owners told them that they wanted to live closer to friends when they were actually selling the home because of the close proximity of a registered sex offender.
Under A.R.S. § 32-2156, no legal action can be taken against a seller for failure to disclose whether a death or felony has occurred in the home, whether anyone with a syndrome or disease not known to be communicable by common occupancy of real estate lived in the home, or whether the home is located in the vicinity of a sex offender.
The knee-jerk reaction to § 32-2156 may be surprise or outrage, particularly because the term “sex offender” conjures media-propagated images of morally bankrupt, sub-human individuals prowling the streets. Why would the legislature immunize sellers for failing to disclose information which may be important to buyers?
The reasons, of course, are numerous. Allowing lawsuits for failure to disclose whether a death or felony occurred in the home would force sellers to investigate events which may have happened years – or even decades – prior to their ownership. Requiring sellers to disclose whether anyone with HIV or other non-communicable (by real estate) illnesses would invade the privacy of the home’s past residents and could result in a canceled sale for dubious reasons.
As for the provision for sex offenders in the vicinity, the legislature clearly wished to place the responsibility of finding that information on the buyer. The registry is readily available to everyone, and buyers can choose how a positive result on the registry website affects their purchase decision. Requiring sellers to disclose that information would likely chill real estate sales and adversely affect home prices, at minimum.
Because “sex offenders” have been so thoroughly and collectively vilified, requiring sellers to disclose their proximity would probably result in many canceled sales without any further investigation. If lawsuits against sellers were permitted for failure to disclose, courts would be forced into the difficult – if not impossible – task of tracking sex offenders’ locations at the time of sale to decide whether a seller discharged their obligation.
Perhaps more importantly, registered sex offender status does not automatically equate an individual to Law and Order: Special Victims Unit levels of dangerous criminal behavior. The Arizona Sex Offender Information website contains a list of around 14,500 people who are legally required to register their presence in the state due to past convictions. Offenses requiring registration include the relatively minor offense of indecent exposure all the way up to the major crimes of sexual assault or sex trafficking. Even non-sexual crimes can result in mandatory registration if the judge determines that the offense was “sexually motivated.”
Although sex offender registration requirements are designed to inform the public and to promote safety, people who made mistakes, were convicted, served their sentence, and have remodeled themselves as law-abiding citizens have earned the right to go on living. Requiring sellers to disclose nearby sex offenders could, in the worst-case scenario, result in vandalism, violence, or retaliation, to say nothing of the difficulty of trying to live a normal life amidst the paranoia of nosy neighbors.
Anyone who wishes to buy a home should be as well-informed about their purchase as possible, but the legislature understood the need to balance the obligations of the seller with the responsibilities of the buyer. According to the Court of Appeals of Arizona, the Lerners should have used the 14-day inspection period to investigate the details of their purchase, including whether any registered sex offenders lived nearby – a simple search of the Arizona Sex Offender Information website, located at http://www.azdps.gov/Services/Sex_Offender/, would likely have revealed the pertinent information.
This holding is consistent with the so-called “buyer beware” doctrine which permeates commercial and real estate transactions in the U.S. Because sex offender registries are readily available to everyone, it is up to the buyer to check them before buying a home.
All is not lost for the Lerners, however, because the court left open the possibility that they could recover against the sellers for fraud if they can prove that they lied about their reasons for moving.
In any case, the Lerner v. BMD Realty, Inc. decision should give pause to anyone involved in a real estate transaction. If you are buying or selling a home, it is important to understand your duties and obligations and how they might affect negotiations.
If you are selling a home, it may be advantageous to disclose certain facts even if you are not legally obligated to do so – if your well-liked 19-year-old neighbor is a registered sex offender because he had consensual sex with his 17-year-old girlfriend, explaining the situation to a prospective buyer will probably result in a more favorable outcome than attempting to avoid the subject.
If you are buying, on the other hand, then understanding the registry and what a positive search result means could prevent you from placing your family in danger. Conversely, carefully examining the registry results and making an informed decision might prevent you from rejecting your dream home because of unreasonable fears.