The facts of the case are summarized as follows: a broker had listed a property as a three-family after being told by the seller that it was a three-family, viewing the property and confirming the use as a three-family and viewing tax records indicating that the City of Boston was currently taxing the property as a three-family.  The property was sold and three years later, when the buyers went to sell, it was discovered that the property as configured was not in compliance with a 1974 variance and in order to be used as a three-family, the owners would need to seek relief from the Zoning Board of Appeal.  The first buyer withdrew and ultimately the property was sold to another buyer for $70,000 less than it would have sold to the first buyer if legally in compliance with the zoning law. 

The owners then sued the seller for breach of contract and misrepresentation and the broker for violating Chapter 93 A.  The jury found the sellers not liable, but the trial judge found the broker liable for damages of $70,000, plus interest and attorneys fees, concluding that although the broker did not knowingly make a misrepresentation, the broker could have discovered the variance and therefore had violated the Consumer Protection Statute.  In the words of the trial judge, it was “improper and, therefore unfair for her to market it one way when it was knowable and should have been known by the defendant firm to be another.”  The trial judge said that the broker, when representing a property as a three-family, must be sure that it was both legally and physically a three-family before marketing it as such.  If the broker could not confirm the zoning, the judge suggested she could have just listed it by the number of rooms the house contained.

The Broker appealed this ruling to the Court of Appeals and the Massachusetts Association of REALTORS® submitted an amicus brief arguing that the decision should be overturned.  In overturning the case, the Court cited the amicus brief, noting that brokers are not expected to be experts in zoning and that the judges solution of advertising properties by room count, as well as determining what was a “room,” was in itself problematic. 

The Court of Appeals, in reversing the finding of liability, noted that the broker, in viewing the property and the tax records, had acted reasonably and was under no duty to determine if the property was in compliance with applicable zoning laws.  This ruling is consistent with earlier decisions of the Massachusetts Supreme Judicial Court and Court of Appeals which hold that brokers may only be held liable for failing to disclose facts only if they have actual knowledge of facts.  Although still subject to Appeal to the Supreme Judicial Court, this decision is a victory for all brokers who list and sell real estate.