With the summer months coming, properties with pools and spas can be attractive f to buyers. In some states, like California and Florida, they’re almost as standard as bathrooms and kitchens. The National Association of REALTORS® suggests that homes with pools are valued more than 50% higher than those without one.
Selling homes with pools and spas can bring particular challenges for real estate professionals though. You need to be aware of the risks and plan ahead to mitigate any areas of potential liability. Too often, issues arise when agents are complacent.
Here are some strategies, so you don’t find yourself in hot water…
Consider Safety as a Top Priority
As a real estate professional, you have an obligation to keep your clients and prospects safe at open houses. When you’re showing a property that has a pool or spa, you need to be aware of the additional risks and put measures in place to ensure safety for all concerned.
The obvious risk is the increased potential for drowning. This may not be a huge issue for adult visitors to the open home, but prospects often bring their children with them, and they could be at risk.
Some actions you can take to reduce the risk of accidental drowning during an open house include:
If a pool is unfenced, you may wish to lock access to the pool area via the house, so you can prevent small children from wandering outside and potentially falling in
Even if a pool is fenced, you could lock the entry gate to the pool to prevent access
You could request the seller to put the pool or spa cover on for the open house (although there have still been reported drowning deaths of children in pools that had covers installed)
Install signage to warn people to act with caution and watch their children if near the pool or spa area
Check that the property owner has insurance for the pool or spa and is covered if an accident happens
Limit the number of people viewing the property at any one time, so you have a little more control over the movements of prospects inside and outside the property
Check Compliance Before Promoting a Pool or Spa as a Feature
Be careful not to ‘oversell’ the benefits without checking on potential compliance issues. Imagine talking up a pool or spa, selling a property to an excited homeowner, and then having them realize post-purchase that it doesn’t comply with the required laws and regulations. Quite rightfully, the buyer could be angry and disappointed, and they may have grounds to sue you for misrepresentation.
Compliance requirements vary from state to state. In California, pool safety is governed by the Pool Safety Act 2018. Whenever a building permit is issued for the construction of a new pool or spa, or when an existing pool or spa is remodeled at a private single-family home, owners need to install two of seven prescribed drowning prevention safety features. To read more about these, click here.
These laws do not apply to existing pools or spas, and owners have no obligation to comply with the new standards. But, if they choose to remodel in any way, then they must comply.
Another potential compliance issue is whether or not the property owner obtained the appropriate permissions from local authorities to install the swimming pool or spa in the first place. Check with the owner and ensure you obtain all necessary permits, documentation and disclosures from them, before marketing the pool or spa as a feature of the home.
(As a CRES real estate E&O + ClaimPrevent® client, you have access to 25 free Building Permit History Reports per policy year, to show buyers the presence or absence of permits.)
As a real estate professional, you don’t need to be an expert in the Pool Safety Act or local regulations. But, having a general awareness can help you better protect yourself and your business in case something goes wrong.
Don’t Provide Advice Outside of Your Expertise
Even if you do have a strong awareness of pool and spa compliance issues, be careful not to extend beyond your areas of expertise when speaking to potential buyers. You are a real estate expert first and foremost, not a pool and spa expert. If prospects ask questions about compliance, refer them to any known pool regulations in your area; and tell them to contact their local county to check for additional regulations or requirements.
Similarly, if potential buyers ask you about the condition of the pool, encourage them to do their own due diligence and have a professional pool inspection to assess the situation.
Know What Needs to Be Disclosed
It’s important you know your legal obligations to disclose. In California, you must disclose anything that could materially affect the property value and/or influence the decision to purchase. If you know that a pool or spa doesn’t comply with legislation, you must disclose this. If you know there’s a crack in the pool, and it requires major maintenance to be serviceable, you must disclose.
You only have an obligation to disclose what you know, and you must only undertake a competent and diligent visual inspection of the property. You are not obliged to engage a professional to do an inspection. For more information about disclosures, check out a Realtor®’s Duty to Disclose.
Make Sure You Have E&O Insurance
Errors and Omissions insurance is essential to protect your real estate business against potential lawsuits. CRES Real Estate E&O + ClaimPrevent® provides you with access to free Legal Services 7 days a week, where you can speak to experienced real estate attorneys.
Contact CRES at 800-880-2747 to find out more about customized insurance solutions for your real estate business.
This blog/website is made available by CRES Insurance Services for educational purposes to give you general information and understanding of legal risks and insurance options, not to provide specific legal advice. This blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. Claims examples are for illustrative purposes only. Read your policy for a complete description of what is covered and excluded.
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