## Facts

- Sellers listed a five-acre parcel for sale through a brokerage and its associate broker.
- A seller walked the property with the broker and identified boundary markers, describing fence lines and other physical features as the boundaries; the seller stated the property had previously been surveyed.
- The broker later showed the property to the buyers and identified the boundaries consistently with the seller’s description, expressing confidence about the boundary location.
- The buyers purchased the property, relying in part on certain improvements (including a corral and related structures).
- Months after closing, the buyers discovered several improvements encroached roughly 18–21 feet onto neighboring land; relocation costs were estimated at nearly $6,000.
- The buyers sued the sellers and the brokers for damages based on misrepresentations about boundary lines.
- The trial court entered judgment for all defendants, finding no knowing misrepresentation by the sellers and no negligence by the brokers; the court of appeals reversed as to the brokers on an “innocent misrepresentation” theory; the state supreme court granted review.

## Issues

1. Whether a real estate broker may be held liable to a buyer for an innocent but material misrepresentation about property boundaries absent negligence or intent.
2. Whether the broker breached the duty of reasonable care by failing to investigate or verify the sellers’ boundary description under the circumstances.

## Decision

- The court reversed the court of appeals and reinstated the trial court’s judgment for the brokers (and the other defendants).
- The court held brokers are not subject to strict liability for innocent misrepresentations; liability requires at least negligence or willfulness.
- The court held the buyers did not prove the broker acted negligently because the broker had no notice or reason to doubt the sellers’ boundary description.

## Legal Principles

- A real estate broker owes a duty of reasonable care measured by the conduct of a reasonably prudent broker under similar circumstances.
- Brokers may be liable for intentional or negligent misrepresentation, but are not guarantors of the accuracy of a seller’s factual statements.
- A broker may rely on a seller’s representations and apparent physical indicators unless there are warning signs that the information is likely inaccurate.
- Whether additional investigation (such as obtaining a survey) is required depends on the presence of facts that would cause a reasonably prudent broker to suspect a boundary problem.

## Conclusion

The court rejected strict “innocent misrepresentation” liability for real estate brokers and held that, without warning signs creating a duty to investigate further, a broker who reasonably relies on a seller’s boundary description is not liable when later-discovered encroachments show the description was inaccurate.


Hoffman v. Connall, 736 P.2d 242 (Wash. 1987)