It’s a sad world we live in. We kill several trees per real estate transaction, largely due to the increasing number of should-be-obvious-to-most-reasonable-people disclosures attached to every contract. At every real estate legal update (including the last one I attended before leaving Alain Pinel Realtors) we get regaled by stories about how a particular disclosure came into existence. The story usually has three high points:
- Person A buys a home from person B.
- Person A regrets buying said home.
- Person A hires clever attorney, who sues person B for not revealing that
Case in point: The Public Schools Disclosure Impacted Schools disclosure, a double-whammy of sorts: a should-be-obvious disclosure wrapped up in a cryptic (and/or mis-worded) headline, now being used by several local brokerages.
…there is no guarantee that a student will be accepted in the proximate neighborhood school…buyers are advised to consult directly with the appropriate school district office to determine the availability of classroom space in the neighborhood of interest.
I’ll bet you this disclosure came into existence something as follows:
John and Jane sported 44 years of formal education between them — including at least three different Ivy League institutions — and an alphabet soup of credentials, including two MBA’s, a JD, an MD. They both had six-figure incomes (the first digit not being a “1″ in either case) and had stashed away $1M from years of aggressive saving plus some extremely lucky stock options.
John and Jane had a son, Joey, whom they were determined would have all the same opportunities they had, plus more. Though Joey was only 4 years old, they had already started on the application process for the Stanford, Harvard, and Yale classes of two-thousand-twenty-something. (Ok, slight exaggeration.) Part of the master plan involved sending little Joey to the absolute best schools available, and they just don’t make ‘em better (at least in California) than they do here in Palo Alto.
So…they bought a $2M house in Palo Alto, right around the corner from a school with an API score of 970.
Fast forward one year. Little Joey is about to enter kindergarten. John and Jane go to enroll him in the neighborhood school…and find out, to their horror, not only that Joey’s class is already full, but that their particular side of the street has been re-assigned to a different school! That’s right, a different school. Still in the Palo Alto school district, mind you, but the new school is a full half-mile away and (shudder!) the API score of said school is only 930 and the other kids going to that school come from the $1.5M-per-house part of Palo Alto.
Naughty, naughty! John and Jane should have done their homework. Arguably, their agent should have better informed them. And perhaps it’s not entirely unreasonable to assume (Benny Hill caveat to the contrary notwithstanding) that proximity to a school equals access to that school. However, given how important education was to John and Jane — you would think they would have done some friggin’ research of their own!
You know where the story is going. They head to their attorney, who looks over the transaction paperwork for a loophole. Aha! The sellers (maliciously) didn’t disclose that living in that home didn’t necessarily entitle Joey to attend the nearest school! Bingo!
What happens after the big lawsuit file arrives on the broker’s desk with a resounding (and expensive-sounding) thud doesn’t really matter as far as this story is concerned. Reasonable or unreasonable, dumb or not, win or lose…from now on, in every transaction, every agent, just to be careful, just in case…has to explicitly explain to his her clients that “proximity to neighborhood schools does not guarantee access.” To make sure they really get this point (and to reduce the risk of a re-occurrence of this lawsuit), they now have to also sign yet another silly disclosure.
Really, now, can’t we just all be reasonable?
When it comes to real estate transactions, I guess the answer is, tragically, no.
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