Listing Brokerage Not Liable for Injury to Prospective Buyer
- Discuss ways to mitigate any obvious or known hazards that exist on a property with the owner prior to showings.
- Take reasonable precautions to protect prospective buyers and others from hazardous conditions when present at in-person showings.
- Consider delaying in-person showings if dangerous weather conditions or other hazards are present.
- Review insurance policies to ensure coverage for client injuries during showings or open houses.
- Follow these REALTORS® Safety Tips when entering a vacant property for showings.
The Iowa Supreme Court recently held that a listing brokerage does not owe a duty of reasonable care to assure the safety of prospective buyers entering a property while their listing agent is not present.
During the morning after a winter storm in 2018, plaintiff, a prospective buyer, slipped on the driveway of a vacant home and suffered injuries prior to a showing. The injured prospective buyer filed suit against the homeowners and listing brokerage, Iowa Realty Co. Inc., claiming defendants failed to provide adequate warning of the icy condition and failed to remedy a hazardous condition. Defendant broker’s agent was not present at the time of the showing and the homeowners were no longer occupying the property.
Defendant brokerage moved for summary judgment as a matter of law, arguing it did not owe a duty of reasonable care because it did not own or possess the property and was not present when the accident occurred. The trial court denied the defendant brokerage’s motion for summary judgment reasoning that a juror could find the brokerage had knowledge of the hazard and should have exercised reasonable care to ensure the conditions of the driveway and exterior walkways were safe.
The Iowa Supreme Court granted interlocutory review to address whether a listing brokerage who is not present meets the definition of a possessor, thereby creating a legal duty of care to entrants on the property. A possessor of land under Iowa law is largely determined by control and authority.
Assessing the seller-agent relationship, the court concluded the homeowners – and not the brokerage - retained immediate authority and control over the property despite its vacant status. The brokerage's mere involvement in helping sell the property did not amount to possession and the court did not believe that merely scheduling a showing with a potential buyer transferred the property’s control.
The court held that the right to enter is not the equivalent of possession or control and reversed the trial court’s denial of summary judgment in favor of the listing broker. The opinion referenced how imposing such a duty on listing brokers would significantly impact an agency’s risk mitigation steps while also increasing costs to consumers. The court even likened a listing broker’s control over a home to a neighbor who is left keys by a vacationing homeowner.
The court did distinguish its holding from other cases where courts have held that when a real estate agent is present during a showing that they are a possessor of the land and thus owe a duty of care. In the court’s dissenting opinion, the dissenting justice argued some agency-owner relationships could create situations with multiple possessors of land exercising control over certain hazards.
The case was remanded to the District Court for Dallas County for entry of summary judgment in favor of Iowa Realty Co., Inc.
NAR’s Legal Action Program supported this case through the filing of a joint amicus brief by the Iowa Association of REALTORS® and NAR in support of the defendant broker.
DeSousa v. Iowa Realty Co., Inc., 2022 WL 2080692 (Iowa 2022).