What a Realtor (or other seller) doesn't tell you that may help make the sale, may be a big mistake. In mid 2001, buyers bought a $225,000 house in Killington through a realtor. It was located below a leaking underground gasoline tank. (LUST site). Gasoline percolated through bed rock into some wells in the subdivision. The realtor knew the house was in a LUST site, and that its well was being monitored for gas. The Realtor didn't disclose either the LUST site or the monitoring.

When buyers found out where their house was, they sued the Realtor under the consumer fraud act (CFA). They asked the Superior Court to rule that the failure to disclose was consumer fraud and no trial was needed. But the court declined, saying the Realtor didn't know the well was contaminated. At a jury trial the court wouldn't allow the buyers to show that gasoline, a deadly carcinogen, was actually in the well because Realtor didn't know that. The jury found that the failure to disclose the LUST site was misleading, but because there was no evidence of contamination, ruled for the Realtor.

On appeal, the Supreme Court reversed, entered judgment for the buyers, and remanded to determine damages. The purpose of the Consumer fraud law, it ruled, is to "encourage a commercial environment highlighted by integrity and fairness." So, it was wrong to rely on what the Realtor didn't know rather than what she did know. The failure to tell a prospective buyer that the house was in a LUST site was consumer fraud as a matter of law, whether or not the realtor knew the well was contaminated. Any concealment that deprives the buyers of a fully-informed decision is fraudulent.

So, six years later, plaintiffs won. What do they get? In some cases plaintiffs may obtain 12% interest on what is ultimately awarded. The CFA may require sellers to give back the purchase price. The Supreme Court has not yet determined if that is proper. If it does so, the realtor could be required to pay as much as $500,000. The failure to disclose the LUST site could be an oversight in a busy office, or deliberate to make a sale. Either way, not only honesty, but extreme care is the only policy for sellers. Vastano and Lees v. Killington Valley Real Estate 2007 VT 33.