State disclosure laws vary widely. Some states require sellers to complete detailed property condition forms. Others require sellers to volunteer almost nothing. But in most states, those laws alone don’t decide whether an agent is liable. Liability usually comes from negligence and misrepresentation rules, which are legal standards built through court decisions rather than statutes.
In California, a decades-old rule goes further. A broker can be held liable not only for defects they knew about, but also for defects that a “reasonably competent and diligent” visual inspection would have revealed. That standard has never been fixed. It shifts with what counts as reasonably discoverable. What counts as reasonably discoverable has changed a great deal as property data has moved from scattered public records into easy-to-use reports that combine many sources.
John Siegman, co-founder of property data platform PropertyLens, says he has seen that shift play out in court. At his first data company, he says, attorneys used the firm’s free property reports as evidence in lawsuits against real estate agents. Describing how those cases were argued, Siegman says, “They said this is public data. You should have had this. You should have disclosed this. You didn’t disclose this. It’s on you.”
The differences in state disclosure law are real, and they create a specific risk. Agents in states with few disclosure requirements can develop a false sense of security. They may assume that if no law requires a disclosure, they have no further duty. That is generally not the case. Courts applying negligence and misrepresentation rules, the same rules behind California’s broker inspection duty, don’t need a law that names a specific hazard to find an agent liable. Instead, they ask what a reasonable agent should have known and disclosed in that situation.
Property data tools may be quietly expanding what “reasonable” means. Pulling together permit records, environmental databases, hazard registries, and insurance history for a single address used to be out of reach for most individual agents. That is no longer true. Several property data providers, including larger firms such as ATTOM, CoreLogic, and Estated, already combine hazard, permit, and environmental data on a national scale.
CoreLogic’s DisclosureSave product is built into multiple listing service (MLS) platforms, the shared databases agents use to list and search homes, to help California agents meet the state’s natural hazard disclosure requirements.
PropertyLens is one newer company in this category. Siegman and his co-founder built it after selling their earlier company, HazardHub, which supplied insurers with data on natural and man-made hazards. Siegman says PropertyLens draws on 90 data feeds backed by about 9,000 underlying sources. Its reports cover hazard exposure, permit history, crime data, utility costs, tax and insurance history, and a two-year estimate of ownership costs beyond the mortgage, insurance, and taxes.
As these tools become more common and more capable, the gap between what is publicly available and what a diligent agent actually knows keeps shrinking. As that gap narrows, the standard of care, meaning the level of caution the law expects from a professional, may rise with it.
Siegman is blunt about how agents react when a report turns up something negative. Investors tend to welcome those findings, he says, because they give them room to negotiate. Real estate agents usually don’t. “If you’re selling a property, you want only the sunshine to be shown on that property,” he says. “But the realtor should be looking at it from a disclosure standpoint and not being sued afterwards.”
That tension exists no matter which tool an agent uses. When a listing agent reveals a soil problem, an environmental concern, or a history of unpermitted work, the seller faces immediate risks. The price may drop, or the buyer may walk away. A hidden issue carries no such short-term cost. The short-term incentive works against transparency, even though the long-term legal risk points the other way. Consider a sale that closes without full disclosure. Later, the buyer discovers the problem and hires an attorney. That attorney can pull the same records the agent could have checked before closing.
Siegman notes that disclosure rules vary greatly from state to state, and some states have almost none. But he says one rule holds across all real estate markets: if a buyer asks a question, the seller has to answer honestly. For that reason, he says, PropertyLens reports include a list of questions buyers should ask the seller. Written questions and answers can also create a paper trail, which may work against anyone who answers dishonestly or incompletely.
For brokerages, the practical question is less about which data provider to use and more about record keeping. A property report only helps in a later dispute if there is a clear record of how it was used. That record typically shows when the report was pulled, what it found, and whether those findings were shared with the buyer. A buyer’s written acknowledgment that they received the information can make that record stronger.
Property reports also have limits. Combined data can be outdated, incomplete, or wrong for a specific address. A report does not replace a professional home inspection or the seller’s own knowledge of the property. Pulling a report without reviewing it carefully can also backfire. If a report flags an issue and the agent does nothing, that same report may later show what the agent knew. For agents and brokerages, the value of property data depends on how carefully it is reviewed, disclosed, and documented.
About the Expert: John Siegman is co-founder of PropertyLens, a San Diego-based consolidated property report service.
This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.
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