IN RESPONSE TO SUBSCRIBER FEEDBACK, Bright MLS (Bright) has revised its Property Condition definitions, effective May 12, 2020.

The new definitions can be found at NVAR.com/propertyconditions. According to Bright, “the options will be simplified to match the nationally recognized definitions used by appraisers, making it easier for you to assign the condition of a property, search for properties that meet your buyers’ criteria, and know the condition of a property for CMAs and appraisals.”

While the use of property conditions remains optional, some Realtors® may have concerns over assigning property conditions to their listings for fear of violating the law or the Code of Ethics.

Virginia Code Section 54.1-2131 imposes an obligation on licensees engaged by the seller to treat all parties honestly and not knowingly provide false information. Virginia Real Estate Board Regulation 18VAC135-20-300(9) further prohibits knowingly making any material misrepresentations. However, the question becomes whether using the property conditions is a deliberate misrepresentation of a specific feature or fact regarding the property, or whether these labels are akin to mere “puffery.”

“Puffery,” or “immaterial boasting and exaggerations …rarely qualify as material misstatements under federal and state law.” Xia Bi v. McAuliffe, 927 F.3d 177, 183 (4th Cir. 2019). Some examples of puffery include statements like “superior quality,” “impeccable craftsmanship” or “pristine condition.” These expressions are mere opinions “which cannot rightfully be relied upon” for purposes of a fraud claim. Tate v. Colony House Builders, Inc., 257 Va. 78, 508 S.E.2d 597 (1999). Realtors® who include property conditions in their listings need not worry about violating Virginia disclosure laws or being subject to a buyer’s fraud claim when giving their opinions on the condition of a property.

There is a similar analysis under the Realtor® Code of Ethics. Article 2 of the Code of Ethics states, “Realtors® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction.” Simply put, a pertinent fact is one that could be a determining factor in a reasonable buyer’s decision to purchase a property. For example, if a Realtor® has knowledge of extensive and unremediated water damage that has been concealed by a seller, the Realtor® could be in violation of Article 2 if they do not disclose the existence of the damage. However, Article 2 also protects Realtors® from any obligation to discover latent defects, so under this same scenario it is not the duty of the Realtor® to discover the water damage.

As the Code of Ethics relate to the MLS property conditions, it is important to consider how a Realtor® could exaggerate or misrepresent pertinent facts while assigning the conditions. Article 2, Standard of Practice 2-5 expressly incorporates state laws and regulations regarding whether factors are pertinent under the Code of Ethics. As discussed above, as a matter of law, a listing agent’s designation of a property condition that is a reasonable opinion would not be a misrepresentation or exaggeration of pertinent facts. On the other hand, if a Realtor® grossly misrepresents the condition of the property, it is possible for this to be a violation of the Code of Ethics. For example, if a Realtor® states that the condition of a property is “excellent” and the property is actually of a “below average” condition, perhaps one with extensive water damage rather than new construction, this misrepresentation could be a violation of Article 2.

Understanding that some sellers might not feel comfortable with their listing agent advertising their property as “below average,” this field continues to be optional in Bright MLS. In an effort to avoid misleading potential buyers, especially with the rise of purchase offers being submitted sight unseen, Realtors® should have honest conversations with their seller clients about how to properly utilize the Property Condition field and how it might affect the sale of their property so the client can make an informed decision. This way, the Realtor® can remain faithful to their Article 1 obligation to act in the best interests of their client without misrepresenting or exaggerating the condition of the property in violation of Article 2.

While intentional misrepresentations are both illegal and a violation of the Code of Ethics, Realtors® should rest easy when using the new Bright MLS Property Conditions definitions.


Daniel B. Harris, Esq. is the NVAR staff attorney.

Matthew L. Troiani, Esq. is the NVAR vice president of professional development & chief counsel.

Stevie Fisher is the NVAR associate director of professional services.