Beware of Zoning Misrepresentations
N.C.G.S. § 93A-6 prohibits a North Carolina real estate licensee from making any misrepresentation or omission of material fact relating to real property. The misrepresentation need not be intentional to subject a licensee to discipline. Even the negligent communication of false information is prohibited. Material facts include not only facts about the property itself, but facts relating to the property, such as a pending zoning change.
The communication of inaccurate zoning information to a potential purchaser of property constitutes misrepresentation of a material fact that can subject a licensee to discipline and also civil liability. In some circumstances, courts have imposed this liability on real estate professionals who communicate information received directly from the seller relating to the property or its zoning. Zoning ordinances change frequently and are not always readily apparent based on the character of the property and the neighboring properties.
Real estate professionals must exercise care communicating accurate zoning information while also considering the buyer’s stated intent for the property in the future. An agent who knows a client’s development plan for real property will not be permitted under the applicable zoning ordinance will be likewise be liable to the buyer for omitting a material fact.
To avoid liability, licensees should refrain from offering information about zoning without first-hand knowledge and/or documentation of the fact, and should listen carefully when their clients communicate an intended property use that may change the character the property to ensure that intended use is permitted.