Real estate brokerage targeted in mold lawsuit

Maria Angelina Casteneda purchased a home from Michael Behnke. Coldwell Banker Residential was the listing broker. After Casteneda and her son Marcos moved into the house, they noticed a moldy smell in the kitchen and downstairs bathroom.

An environmental test later revealed a dangerous level of mycotoxins and mold spores. The estimated cost of repairs to remove the mold was about $25,000.

Purchase Bob Bruss reports online.

The exposure to the mold caused Casteneda and her son Marcos to become ill, causing Marcos to develop asthma.

Marcos sued the house seller, the seller’s listing agent (Coldwell Banker) and others, alleging breach of duty to disclose home defects. He alleged negligence, nuisance, fraud, misrepresentation and concealment of a dangerous condition causing Marcos severe emotional distress.

Real estate broker Coldwell Banker argued it had no legal duty to Marcos because he was not a party to the sales transaction. But the attorney for Marcos replied the real estate agent knew Marcos would reside in the house with his mother so there was a duty to disclose defects that might adversely affect him.

If you were the judge would you rule listing agent Coldwell Banker has a duty to disclose home defects to the purchaser’s child who later allegedly developed asthma due to mold in the residence?

The judge said no!

For there to be legal liability, either in contract or tort, whether intentional or negligent, imposed by statute, contract or otherwise, there must be a legal duty to the injured person, the judge began.

However, in this situation Marcos was a third party to the transaction, the judge continued.

Although the real estate broker had a legal duty to the buyer to disclose home defects of which the agent was aware, the judge explained, Marcos was not involved in the sale, so no legal duty was owed to him.

Because Marcos was not a buyer of the house, he was a third party to the home sale, so real estate broker Coldwell Banker had no legal duty to him to disclose home defects of which the listing agent might have been aware, the judge ruled.

Based on the 2004 California Court of Appeal decision in Coldwell Banker v. Superior Court (Salazar), 11 Cal.Rptr.3d 564.

(For more information on Bob Bruss publications, visit his
Real Estate Center).

***

What’s your opinion? Send your Letter to the Editor to newsroom@inman.com.