Landlord Can Sue Broker for Failing to Reveal Tenant's Criminal Record

Landlord sued real estate broker who had rented landlord's Southampton property to tenant, after tenant never paid rent and landlord had tenant evicted. Landlord claimed that the broker had assured him that it had performed a background check yet never revealed to landlord that tenant had a criminal background. The broker asked the court to dismiss landlord's claims. The court ruled for the broker in part. The broker didn't violate any fiduciary duty by failing to provide a thorough background check of tenant and had no specific contract duty to perform a background check. But while the broker had no duty to investigate, it did have a duty to fully disclose knowledge it obtained that materially affected the transaction. The broker had a duty of undivided loyalty, which landlord claimed was breached by the broker's failure to inform landlord of tenant's criminal record. This claim wasn't dismissed.

Omabegho v. The Corcoran Group: Index No. 654413/2016, NYLJ No. (Sup. Ct. NY; 8/16/17; Cohen, J)