A buyer is considering a property in one of the subdivisions of a Planned Unit Development (PUD). The buyer noticed nearby properties having detached…

The broker's fiduciary duty includes exercising reasonable care and skill, which involves advising the buyer to conduct thorough due diligence. In a Planned Unit Development (PUD) with a Homeowners Association (HOA), the Covenants, Conditions, and Restrictions (CC&Rs) and HOA governing documents are the legally binding sources that dictate property use. These documents will contain the definitive rules on new construction, architectural standards, permissible uses (such as home businesses), and any restrictions on detached structures. Recommending the buyer obtain and review all current documents is the most comprehensive and prudent action to ensure their intended use is permissible before proceeding with the purchase.

A. This is incomplete. Architectural review is a secondary step; the buyer must first confirm if a detached building and a home business are permitted at all by the governing documents.

B. This is also incomplete. It only addresses the "home business" aspect and completely ignores the critical question of whether a new detached building can be constructed on the lot.

C. This is negligent advice. The existence of other detached buildings does not guarantee approval for a new one; rules may have changed, or existing structures could be non-conforming uses.

1. Massachusetts Board of Registration of Real Estate Brokers and Salespersons, 254 CMR 3.00: Professional Standards of Practice.

Reference: Section 3.00(10)(b).

Content: This regulation mandates that a real estate broker must "exercise reasonable care and skill" in their performance. Advising a client to obtain and review the primary governing documents (CC&Rs and HOA rules) for a property subject to such restrictions is a fundamental component of exercising such care.

2. Massachusetts General Laws, Chapter 112, Section 87AAA 1/2.

Reference: MGL c. 112, § 87AAA 1/2 (a)(ii).

Content: This law outlines the duties of a buyer's agent, which includes acting in the buyer's best interest. Guiding the buyer to verify material facts, such as use restrictions that could impact their decision to purchase, is central to this duty. The CC&Rs are the source of these material facts.

3. French, S. F. (2000). The New Restatement of Property: A Major Step Forward for the American Law of Servitudes. Real Property, Probate and Trust Journal, 35(1), 1-28.

Reference: Pages 5-7.

Content: This academic journal explains that restrictive covenants, such as those found in PUD CC&Rs, are servitudes that "run with the land" and are legally enforceable against subsequent owners. It underscores the critical importance of a prospective buyer reviewing these documents to understand the limitations on their use of the property.