Legal Commentary

Smoking out a Dubious Lawsuit: Massachusetts Woman Sues Real Estate Broker over Second-Hand Smoke in Condo

By Ilya Somin

A Massachusetts woman is suing her real estate broker over exposure to second-hand smoke in her condo, which the broker helped her purchase:

Alyssa Burrage says she was smoked out of her new $405,000 condominium.

Burrage, a 32-year-old advertising company employee with a history of asthma, had smelled cigarettes when she first visited the bright, parlor-level condo in Boston?s South End in 2006 with her real estate broker. But the broker, she alleges, assured her that the owner must be a smoker and the stench would disappear.

After Burrage moved into the Milford Street brick row house, she says, she discovered the secondhand smoke was coming from one of two men living in the condo below. The men and the condo association refused to fix the problem, she adds, and she had to move out.

Today, in what tobacco law specialists call one of the first lawsuits of its kind to go to trial in Massachusetts, a jury is scheduled to decide whether Burrage?s real estate broker is liable for damages.

I hate cigarette smoke myself. And I think the real estate broker should not have been so quick to assume that the stench was left over from a previous owner. Despite these points, I think this is a very dangerous lawsuit, and I hope it fails.

Regardless of what the broker said, any reasonable buyer should realize that there?s no way to guarantee that you won?t have neighbors who smoke in a building where smoking isn?t forbidden (as it apparently was not in this condominium association). Even if the current neighbors are all nonsmokers, you don?t know who might live there in the future. If asthma or some other factor makes it necessary for you to live in a home completely isolated from smokers, you should buy a unit in a condominium association that forbids smoking, rent an apartment in a building with such a ban, or buy a free-standing house. Another possible option is to engage in Coasean bargaining with neighbors (i.e. ? compensating them in some way for foregoing the right to smoke in their condo).

If real estate brokers can be held liable for remarks like this, the end result will be to make brokers more expensive and/or that brokers will be very reluctant to give advice to their clients for fear that it might turn out to be wrong and land them in legal hot water. Indeed, that may happen even if the broker wins this particular suit. The Boston Globe article on the case says that the broker offered Burrage a settlement because doing so was cheaper than litigating the case. Unless the courts or the Massachusetts legislature firmly slam the door on these types of lawsuits, this result could be a signal to future plaintiffs and lawyers that this kind of case is an effective nuisance suit. That, in turn, will reduce the value or increase the cost of real estate brokerage services for all Massachusetts buyers.

Perhaps current Massachusetts law allows these kinds of suits nonetheless. If so, it should be changed.

UPDATE: The linked Boston Globe article has been updated to indicate that the case has been settled for an undisclosed amount.

UPDATE #2: Some commenters who claim that it is important to prevent brokers from making inaccurate statements may be misconceiving the role of real estate brokers in such transactions. Much of what the broker does is give his client probablistic advice about such matters as the condition of the property, its likely future market value, and so forth. Such claims are necessarily fallible and will often turn out to be wrong. They are nonetheless valuable to clients because, on average, they are more likely to be correct than the client?s own less expert judgments. If brokers risk a lawsuit any time their advice on such issues turns out to be wrong, they will probably either be much less willing to give advice, charge more for their services, or some combination of both. None of these options is likely to be good for consumers. Obviously, the situation is different if the broker and the client sign a contract in which the former assumes liability for any mistakes in his advice on a particular range of subjects. But that doesn?t seem to have happened here.

Full post as published by The Volokh Conspiracy on February 09, 2010 (boomark / email).