Broken Dreams Could Cost $5Million for 5,000 missing Sq Ft.

The front page of the New York Times real estate section today featured an article about a lawsuit regarding a home’s square footage.  While there have been several suits over the years when a home didn’t measure up to the listing broker’s stated footage, this is an extreme case of damages sought and a complicated case of dual agency, divided loyalties and what appears to be a practice of inflating square footage to include space that assessors and/or appraisers do not.

In a nutshell – there should be a very, very good reason if your listing square footage doesn’t match the assessors card.  Some may want to consider a brokerage policy to have a third party professional establish the correct square footage if there is a discrepancy.  Agents should also talk to their broker for how to handle the situation when/if there is a need for the assessor to reexamine the field card information.  And of course, to combat most all undisclosed dual agency issues, follow these steps for every dual agency situation, for every party (1) Discuss Agency in General with Disclosure (2) Discuss Dual Agency with Consent form (3) Discuss Dual Agency again, with Disclosure when it happens. (4) RETAIN the documents.

Not only is the New York Times article a good read for brokerages, but so is the Manhattan penthouse apartment case that had 152 square feet missing and an undisclosed dual agency situation thrown into the mix that netted a verdict against the REALTOR / Brokerage for $2.08 million dollars in damages. Yikes.

Thanks to Jonathan Hankin and Suzanne Crerar for sharing the articles…