Ruling backs Ariz. law on sex offender disclosures

PHOENIX — Home sellers and their real estate agents have no obligation to tell buyers there's a registered sex offender living next door, the Arizona Court of Appeals ruled Tuesday.

The judges rejected arguments by a couple buying a Scottsdale home that they had a right to know about the neighbor, especially because they had small children of their own. The court said the documents the buyers signed specifically said it was up to them to learn who was living nearby.

And the judges specifically said there is nothing unconstitutional about a state law which alleviates sellers from such disclosure.

But the judges said there may be a separate claim if the buyers can show that the sellers lied to them by saying, in response to a question of why they were moving, responded that it was to be closer to friends. The buyers contend the sellers hid the real reason: wanting to get away from the sex offender.

That omission, wrote Judge Diane Johnsen, may have been material to whether the buyers went through with the purchase. And that, she wrote, entitles them to pursue a claim of fraud.

Tuesday's ruling, unless overturned, is a warning to home buyers that they have to do some research on their own to know everything there is to know about a home.

The fight surrounds the purchase of a home by Glen and Robynn Lerner from Jeff and Marissa Currier. Both parties agreed to use DMB Realty to handle the transaction.

It was later found out there was a Level 1 sex offender living next door.

That is the lowest level of offender. And, unlike higher-level offenders, there is no centralized database where individuals can find out where they live.

Johnsen, writing for the majority, said that, as a general rule, sellers have an obligation to disclose things that would not otherwise be obvious to a buyer.

But Johnsen and her colleagues said all that is legally irrelevant as state law spells out that sellers do not have to disclose this kind of information.

Johnsen said the fraud claim, however, is a different legal matter.

She said state law makes it fraud to knowingly make a “false and material representation'' with the intent that the person hearing that would act on that information.

In this case, the judge wrote, the buyers are claiming that the sellers “misrepresented their true reason for wanting to move'' by mentioning wanting to be nearer relatives when the real motive was to get away from the sex offender.

That allegation, Johnsen wrote, is enough to let a jury decide whether the buyers were defrauded.