Zoda v. Eckert: Washington Court Rules MLS Error Not Discharged Through "As Is Move-In Agreement"
In Zoda v. Eckert, the Court of Appeals of Washington addressed questions regarding MLS errors, "As Is Move-in agreements," and whether a real estate salesperson purchasing a house for personal use was an agent of the seller. The court held that a real estate agent who purchases a home for her own use did not have an independent duty to inspect information in a MLS and was not an agent of the seller.
In April 1979, seller signed a listing agreement on a house with Eckert, Inc. (broker). Clark, a salesperson for Eckert, prepared a MLS form which stated the house had 2,800 square feet and a heat pump.
Katherine Zoda, a real estate agent, contacted Clark and informed him that she might wish to purchase the property for her home. They viewed the property and Zoda apparently obtained the square footage and heat pump information from the listing agreement. Clark prepared a Purchase and Sale Agreement which was signed by Zoda and clearly stated "Katherine is a Lic. real estate agent in the state of Washington." Clark prepared a commission splitting agreement for Eckert and Advance (Zoda's broker), and Zoda received a share of the commission. Clark also prepared a "Move-in Agreement," containing an "as is" clause, for Zoda and seller which allowed Zoda to move into the house prior to closing. Throughout the process, Zoda had no personal contact with the seller.
When Zoda had the home appraised, she discovered there was only 2,500 square feet and had no heat pump. Zoda sued the seller, Eckert, and Clark for negligent misrepresentation. The defendants appealed and claimed damage due to Zoda's failure to disclose she was a licensed real estate agent. They also claimed Zoda's receipt of a commission made her a sub-agent for the seller and, as such, she was guilty of the same misrepresentation.
The Court of Appeals of Washington held for Zoda, stating that a purchaser of a home, who is also a real estate agent, does not have an independent duty to inspect information on a listing form and MLS information sheet. The court based this on the fact that Zoda was not transmitting information to the public, but was only relying on it as would any other purchaser. The court also held that the "as is" clause pertained to the condition of the premises, which was wholly separate and distinct from the size of property or existence of a heat pump, which only an expert could determine.
The Court of Appeals of Washington then addressed the defendant's claims. The court dismissed the non-disclosure issue by stating that Zoda disclosed on the offer to purchase that she was a licensed real estate agent. Regarding agency by receipt of commission, the court held that such receipt did not turn Zoda from purchaser into "selling agent" of the house, as she was not under control of the seller, could not have sold property to anyone else, and did no more than any other purchaser of a home. As for sub-agency, the court stated that agency results only if there is an understanding between the parties in which the agent is subject to the direction of the principal. They held that Zoda and Advance were not members of the MLS, nor were they the listing agent or broker and, therefore, they were not subject to any direction or control by seller. Additionally, because Zoda had no personal contact with seller, she could not be their agent.
Zoda v. Eckert, 36 Wash. App. 292, 674 P.2d 195 (1983).