Court: Real-estate brokers can be held legally responsible for what they tell buyers

A divided Massachusetts Appeals Court ruled today a man who bought a Norwell house in part because the broker told him it was zoned for use as the hair salon he wanted to open should get a trial to try to persuade a jury he deserves damages because it turns out the house wasn't zoned for that use.

Daniel DeWolfe bought a two-family house on Washington Street in Norwell that had been advertised by its listing brokerage, Hingham Centre, Ltd., as zoned "Business B," which a broker told him meant it was suitable for a salon. The property's MLS listing also said it was zoned that way, and the broker gave him a copy of part of the town zoning code allowing salons with "Business B" handwritten at the top.

In fact, the property was zoned "Residential B," which does not allow salons, and something DeWolfe did not learn until after he had gotten both a permit for a new septic system and a building permit to install his salon on the first floor.

A Superior Court judge threw out DeWolfe's lawsuit based on an earlier Appeals Court ruling that held brokers harmless in such zoning issues. A three-judge majority on the court, however, noted that the broker in that case never made any representations about the property's specific zoning.

And in their ruling, which hinged in part on a discussion of the grammatical construction of a clause in the purchase-and-sale agreement, the majority said that if the purchaser is looking for a particular kind of zoning and the broker keeps promising it, then the broker has a duty to ensure he or she got the zoning right on the property in question.

At issue was a standard clause in the purchase-and-sale agreement:

The BUYER acknowledges that the BUYER has not been influenced to enter into this transaction nor has he relied upon any warranties or representations not set forth or incorporated in this agreement or previously made in writing, except for the following additional warranties and representations, if any, made by either the SELLER or the Broker(s): _____

Where the blank had been filled in with "None."

The majority said clause after the "nor" is crucial because DeWolfe had relied on previously written representations, specifically, the MLS listing and the copy of the zoning code with "Business B" written on the top he'd been handed. To do so otherwise would be to render that half of the clause "surplusage," or useless verbiage and the law does not abide by useless verbiage.

The two-judge minority, however, said the "nor" means the only things the buyer should rely on is language specifically mentioned in the agreement - and it did not refer to zoning - or additional clauses the parties agreed to insert into the contract, which in this case, both sides agreed to add "none." The majority countered, however, that that would actually negate a long held right of buyers:

It would strip from every buyer using this form his or her right to rely upon written warranties or representations made by brokers or sellers, a right that every buyer and every lawyer until now properly has understood the buyer to have.

• Complete ruling, DeWolfe vs. Hingham Centre, Ltd. and others