Advertising Permitted Number of Bedrooms

QUESTION: The owners of a four-bedroom house would like to list it with me, but there’s a catch. The house has an on-site sewage system. After they bought the property the owners discovered that when the house was built 15 years ago, the builder obtained an improvement permit for a three-bedroom house. The first buyer apparently finished  out a “bonus” room as a fourth bedroom. May I list the property in MLS as a four-bedroom house and indicate in the “remarks” section that the improvement permit was for  three bedrooms? That’s just stating the facts, right?

ANSWER: While it may be factually correct that the house has four bedrooms and a three-bedroom improvement permit, it is undeniable that the purpose of listing the  property in MLS as a four-bedroom house is to market it to buyers who are looking for a house with four bedrooms. Marketing the property as a four-bedroom house may be  seen as encouraging overuse of the property’s sewage system and could subject you to discipline by the NC Real Estate Commission for misrepresentation of a material fact. The Commission has long taken the position that a licensee who advertises a property for sale as having a certain number of bedrooms should be sure that any on-site  sewage system is permitted to handle that number of bedrooms. As is set forth in a Real Estate Commission Bulletin article on the subject, “[i]f a licensee encourages  overuse of a property through his advertising or by other means, the occupants of the property may overload the system, thereby contributing to its eventual failure. When the sewage system fails, the local health department can prohibit further use of the system (and in turn occupancy of the property), in order to prevent contamination of the  surrounding groundwater and to protect the public health. Even if the system is repairable, lower occupancy limits may be imposed. At that point, the occupants and owners  of the property may blame the licensee for their losses. They may also complain to the Real Estate Commission.” (See “Advertising occupancy of properties served by on-site sewage systems,” Fall 1993 issue of the NC Real Estate Commission Bulletin.)