What REALTORS® Need to know about Meagan's Law

Feb 25, 2014

By: Howard W. Goldson

Previous articles written by the author as well as LIBOR staff on the problem of "Megan's Law" have all departed from an initial assumption that the broker had actual knowledge of the fact that a sex offender was living in the vicinity of a property which the broker either had listed for sale or was about to sell as a subagent of a listing broker. Recent litigation on Long Island has raised a new question. That question is: Does the broker have an affirmative obligation to discover whether or not a registered sex offender resides in the vicinity of a property which the broker is attempting to sell? This new question of whether or not a duty exists for the broker to find out the information in the first place is even more complex than the questions previously discussed. It is the opinion of this writer that the answer to that question to some extent depends upon whether or not the broker is representing the seller (traditional real estate brokerage relationship) or is representing the buyer (a buyer's broker).

Reviewing the question from the point of view of a seller's agent, the general rule of thumb is that neither an owner nor a broker need disclose facts which the buyer could discover for themselves by the exercise of ordinary intelligence. Sex offenders registered under Megan's Law are registered in a state sex offender registry that can be accessed by anybody calling 1-900-288-3838. Consequently, although I am aware of no court which has decided this precise issue, I believe is it reasonable to conclude that if a purchaser is interested in obtaining information on registered sex offenders in the vicinity of the home which they are purchasing, they can get that information by a simple telephone call and the payment of a five dollar fee. Based upon that fact, it is the writer's opinion that obtaining information about registered sex offenders falls under the same category as obtaining information concerning publicly recorded documents with respect to the title of the house, i.e., recorded deeds, mortgages, judgments or other recorded liens. There is certainly no obligation for a seller's broker to go into the public records and obtain this information for a purchaser. Consequently, this writer concludes that there is likewise not a legal obligation for a seller's agent to ascertain whether or not there are registered sex offenders within the vicinity of a particular property.

Considering the same question from the perspective of a buyer's broker, this writer believes the answer is very different. A buyer's broker owes a fiduciary duty to the buyer. As such, the buyer's broker may be under an obligation to review public records to ascertain accurate information about the property for the buyer. This might well include a review of recorded documents such as mortgages, deeds, judgments and other recorded liens. It might very well also include an obligation to make an inquiry into the public records to determine whether or not there are any registered sex offenders in the vicinity of a house which the buyer's broker is attempting to obtain for their client, the buyer. Indeed, recent court decisions decided outside of New York have cast upon a buyer's agent the obligation to examine public records to determine the exact dimensions of an easement affecting real property and to verify from a home warranty company whether or not a home warranty contract actually existed with respect to property being considered by the buyer. These early cases certainly indicate that courts will impose greater obligations on brokers representing buyers to protect the buyer than those imposed upon brokers representing sellers and dealing with buyers as a seller's agent.

As I started earlier in this article, this area of the law is still not well defined. Certainly buyer's brokers should consider preparing a buyer's broker contract form which clearly delineates exactly what obligations the buyer's broker intends to undertake on behalf of the buyer and perhaps even clearly stating those actions that the buyer's broker is not going to perform, i.e., "the broker shall have no obligations to search public records, including the New York State sex offenders registry, to ascertain information about the property. The buyer's broker's sole obligation with respect to any information conveyed to the purchaser about a particular property shall be to reveal the source of the broker's information." Most buyer broker agreements which I have seen do not carefully consider exactly what the buyer's broker is committing themselves to do and setting forth within the agreement clear language reflecting the obligations which the buyer broker is willing and intends to take. Certainly, real estate brokers practicing buyer brokerage as well as the lawyers who represent them should give much more careful thought to this entire area in general and Megan's Law in particular.