You represent the seller in a deal that fell through due to an “unfavorable” home inspection report, must you disclose to future prospective purchasers the reason why the original buyers backed out?
Most likely, yes. Attorney General regulations explaining Massachusetts General Law Chapter 93A
provide that it is a violation when an agent, “fails to disclose to a buyer or prospective buyer any fact, the disclosure of which may have influenced the buyer or prospective buyer not to enter into the transaction.” Disclosure is limited to facts known by an agent, not suspicions or rumors; Chapter 93A requires that a real estate agent volunteer these facts, even if not asked. It is recommended that these disclosures be made in writing, so it is clear as to when and to whom the disclosures were made.
Should you share the inspection report from the original buyer to other prospective buyers?
No, not without the original buyer’s permission. There is a distinction between the information in the report and the report itself. If you know about problem conditions in the property, those conditions must be disclosed to other buyers as the home inspector is an expert. The paper copy of the report itself is the property of the first buyer, since that buyer paid for it. You as the buyer’s broker should not give property of the first buyer to another buyer without permission. It is recommended that you ask the first buyer for permission to provide a copy of the report to the listing broker. Doing so reduces your risk that a buyer will claim that any facts were omitted. As the listing broker, if the buyer’s broker sent you the report, you are then required to pass on that information to all future potential buyers.