Episode 26: What’s That Smell? - Fong v. Sheridan

In this episode, Cassie, Ali, and Danielle discuss the real estate case of Fong v. Sheridan.

Plaintiffs Justin Fong, M.D., and Suzanna Fong bought a property on the seaside in beautiful Tiburon, California. The couple noticed prior to purchasing a bad odor in the room downstairs, but the parties’ dual agent said it was just “sea air”. Unfortunately once they moved in they realized it was due to septic tanks and buried oil!

Listen to the episode to hear our take, if they got any money out of the case, and if it was really the realtor’s fault.

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ABOUT US -🎙 Agents Unfiltered SEASON 2 is about a deep dive into some wild real estate cases and give our take! Get ready for some relatable and relevant information about “The Do’s, the Don’ts & the What The Fuck’s of Real Estate.”

PODCAST TRANSCRIPT:

Hey everyone, welcome to agents unfiltered, where we talk about the do’s, the don’ts, and the what the fuck’s of real estate. We are Ali, Danielle, and Cassie. Join the three of us every week as we deep dive into some wild real estate cases and give our take. We are not attorneys and want to make it clear that this podcast or any linked materials should not be construed as legal advice. Nor is this information a substitute for professional expertise. We are not lawyers, doctors, financial advisors, and mortgage lenders, but we are your new BFFs

Cassie: Okay. I’m excited about this one. We are gonna talk about Fong v. Sheridan. This one happened in Tiburon, California in a little neighborhood that’s like an oceanfront and secondary oceanfront.

Danielle: Tiburon? Is that how you say it?

Cassie: I don’t, how do you say it?

Danielle: I don’t know. I don’t even know where it’s at.

Ali: I’m so sick of her. She’s kinda the worst. She’s like, I dunno how to say it, but I’m still gonna make fun of you for the way you said it.

Cassie: She’s going to research the proper way to, so everyone, please hold while Danielle tries to correct me.

Ali: Are you a Leo perchance?

Cassie: Don’t group me with her.

Danielle: You do the same shit. What are you talking about?

Cassie: Only when I actually know.

Danielle: That’s true.

Ali: You are acting very confident and making fun of me when you don’t know how to pronounce it.

Danielle: I wasn’t when making fun of you. I just asked if that’s how you actually say it.

Ali: Were you like everyone Spelling Bee? Do you know how I was phonetically how to do things and like the origin of words?

Danielle: I just like to know because I feel like it people get real particular about that.

Cassie: Okay. I apologize if I’m mispronounced. Danielle’s about to find out for us. Please feel free to send a strongly worded email if I mispronounce your city, and please address it to Danielle. Thank you. Can I please be the center of attention just for now?

Danielle: Yes, Oh, Leo, I know it’s hard to share the spotlight, but I would just like to take a moment.

Ali: Get fucking on with it, Cassie.

Cassie: Okay, now that everyone’s paying attention to me. In 1974, a person with a last name Sheridan, purchased this home. He lived there for 18 years and then leased it until October of 2007. Jim Armstrong showed the property to his clients, the Fongs. When they were looking in the property, they mentioned that the basement smelled musky and asked what the musky smell was coming from.

The agent said it’s the salty sea air, so they purchased the home. They moved in June or July of 2008, and they just kept noticing an oily smell in the house, specifically downstairs. After living there for two years, they hired a contractor to dig a little deeper and see what is causing the smell. The contractor found a buried septic tank on the property and a buried oil tank on the property.

Danielle: Shut up. That is so bad.

Ali: I feel like septic tanks are often buried.

Cassie: But the oil tank was not disclosed.

Danielle: Sorry, really quick just to back up, they lived there two years before they hired a contractor to come in.

Cassie: Yes. They waited for two years. They immediately sent a letter to Bradley Real Estate, letting them know what was going on. The attorney for Bradley said, let’s mediate. In July of 2010, the Fongs filed an instant action lawsuit against the agent and the brokerage, as well as the seller for breach of contract negligence, misrepresentation, and then breach of fiduciary contract.

They filed this in July of 2010. It takes a long time. There’s a lot that goes into it. In July of 2011, they were working to remove the oil tank and the contractor that they hired cut the pipe on the oil tank, which seeped the oil into their yard. Oh my gosh. After that, they had the soil cleaned up, but the smell was really overpowering. The wife ended up having to be hospitalized. They moved out of the house and were trying to figure out if it was going to be inhabitable, and were told in July of 2012 the home needed to be torn down. There was nothing they could do from damage from the oil.

Danielle: I have a couple questions. Bradley Real Estate, did they represent the buyer and seller then?

Cassie: I believe they only represented the buyer.

Danielle: The seller was representing themselves?

Cassie: I don’t know who was representing the seller, that wasn’t listed. They didn’t go after the seller’s agent though. They went after the seller and their buyer’s agent, because the buyer’s agent said, it’s the salty sea air that you’re smelling and he didn’t know that for sure or say, I don’t know what that smell is, maybe we should dig deeper.

Ali: He didn’t say ‘could be.’

Cassie: That’s why they went after them. In 2014, they decided to amend their complaint to ask for rescission of the purchase and sale agreement. It was decided they settled for $275,000 and they were told that they had failed to prove that there was a breach of contractor fraud, and they were unhappy with that decision. They didn’t feel like it was enough, so they appealed, and in the appeal, the Sheridan ended up being the winner and basically getting their realtor fees covered because it was found that they didn’t know about the tanks and they weren’t at fault and were dragged through this huge ordeal.

The Fongs were like, Nope, and they took it back to the appeal court and it was finally decided this is what the decision is. You got your $275,000. Everyone needs to pay their own realtor fees. Case closed. That’s where it landed, but in the end, the realtor was found to be at fault for saying that there was a salty sea air smell.

However, because the rescission was denied, and because they waited way too long to say, we also wanna fight for rescinding the contract, and because they wanted to rescind the contract after the home was uninhabitable because of a contractor they hire cut the pipe to the tank causing an oil spill which made the home uninhabitable.

Ali: Were they recording the conversation with the realtor where it was for sure said like that is what it is? How many times can perception play into after that much time has gone on? Like how is there proof of it that’s specifically what the realtor said?

Danielle: That’s what I was thinking was like how many times have we all had different ability to smell. I noticed this after having covid of like, I can’t smell as many things as before. Like, he was smelling the same thing they were smelling?

Cassie: I don’t believe it was anywhere in writing. From what I read, it was all verbal conversation in the home, and because he said it’s just the salty sea air, it didn’t make them inquire any further. Like he made a statement without knowing for sure, and then it turned out that it was this oil tank that was in the yard.

Danielle: I mean, I feel like that’s tough for the buyer’s agent, but it sounds like they both must have had realtors, right?

Cassie: Their main argument was that their agent didn’t do his due diligence.

Danielle: : I’m trying to play this through in my head. Yeah. Like from a logical perspective. I kind of get what they’re saying and I think it goes back to like, we always need to watch what we’re doing right, but there’s a big part of me that’s like, I guess the agent could have said, ‘Hey, my buyer smelled some sort of smell,’ but even if he had, if the sellers didn’t know it was buried there, which was ruled by the court, he would’ve gotten no further answer anyways.

Ali: Well, you know what’s like, kind of interesting. I showed a place the other day and we were down in a room and there was a little of a gas smell and we like, is that a gas smell or not, but even as someone who was just showing the home, I immediately texted this like the listing agent. I was like, ‘Hey, there’s like this little bit of something. It could be something, could be nothing but just a heads up.’ There’s just so many ways for this to be disclosed or even paid attention to before it got to this point. It makes me wonder how it got so far.

Cassie: Then also I think musky compared to oil smell. If they had said there was an oil smell in the basement and the verbiage was like quoted as musky smell, but I’m like, musky smell, what does that even mean? I thought it was gonna be moldy, when you said that. If my clients ask me about a damp smell, I will say, if you’re concerned about it, you can get an inspection specifically to look into that. I’m never gonna say if it does or doesn’t. I have clients ask me about smells sometimes.

Danielle: All the time.

Cassie: Especially if it’s like a cat smell.

Ali: Like, well it could be cat pee, it could be meth. Who knows.

Cassie: I know, like, I’ll just say, you know, well they have cats who could be that, but I’m not really sure. It’s hard to say exactly what it’s coming from.

Ali: The only thing that I have a hundred percent been like I know that smell is when you open a teenage boy’s room. We all know what that is.

Cassie: I did a final walkthrough once and oh my god, this was the most stressful final walkthrough of my life because as soon as we go in, the alarm starts blaring in the house, the security system, and it was like, you could see the clouds in the air from like, someone had just been smoking a ton of weed and it just reeked of weed. The alarm is going off, I’m trying to call the list agent, my clients are like ‘oh my gosh, is the carpet gonna be ruined from all the weed smell,’ and then the clients like barge in thinking their house is getting broke into because the other agent didn’t tell them we were coming for the final walk through. I had it in my text that he had confirmed.

Danielle: Oh my gosh, I was going to say it like, that’s the smell of college houses: BO and weed every time.

Cassie: Yes, BO and weed. The agent ended up paying to have the carpets cleaned for them, which we’ve never smelled it up to that point.

Ali: You just know those poor people are like, let’s just take our final smoke and have our goodbyes, and they’re just like, we almost just disrupted this entire deal.

Cassie: They came back with fast food and thought that we were breaking it.

Ali: Of course they came back with fast food. Taco Bell or Wendys?

Cassie: I was like “I am the real estate agent! It’s fine! They charged in ready to fight. We didn’t know what to do

Danielle: Awkward. That’s wild.

Ali: That’s one of those ones where it’s like, not funny in the moment, but looking back at it after, it’s pretty funny.

Cassie: Well, and that one was like a two hour drive for me and I had to go out the next day to redo the final walk through.

Ali: Was that in for, was that in Creston?

Cassie: No, Moses Lake. I was so happy to do it because I adored my clients and I wanted to make sure that everything was there. It was a good walkthrough, but yeah, that they had a positive final walkthrough because they accidentally sent me an article about what should happen in a final walk through that they’d meant to send to each other. I was like, I know that didn’t go the way it was supposed to. But anyway, I feel like it’s so crazy that just saying that the musky smell is just not saying anything definitive.

Danielle: I think that’s what you take from it is make sure you don’t say anything definitive. Again, though, like you said, how many years later, who knows if that’s actually what was said.

Cassie:. This case took forever because they originally filed in 2010 and it was closed in 2015 after all the appeals.

Danielle: For real though, the whole contractor thing like that has nothing to do with the sellers or the agent. Like, the contractor’s insurance should be covering that.

Ali: It made me wonder, that’s part of it, but it just wasn’t mentioned in the court case because there had to have been something with that you think?

Cassie: Well, so the contractor claimed that they had given verbal permission once again, verbally, to cut that pipe and cap it. The problem is there was oil.

Danielle: How much oil was in that tank?

Cassie: Enough to make the house uninhabitable.

Ali: How scary that it was just like a ticking time bomb under that place. Imagine if there was just like a fire or any sort of thing and that thing’s just chilling under there.

Cassie: It was causing them to feel physically ill and she ended up in the hospital.

Danielle: Here’s another question then. The other person lived there for 18 years, and didn’t have effects from this?

Cassie: Apparently not. But, it took them two years to look into it. The seller didn’t know there was an oil taken on the property, how long had it been there?

Danille: She didn’t have issues and needed to be hospitalized until after it had been cut and it had been remedied. That makes more sense.

Ali: Should have just left it alone.

Cassie: It could have just been a really old oil tank that was putting out fumes because it was an older tank and was getting worse over time as it aged. If the seller didn’t know about the tank when he bought it in ‘74, who knows when it was put in.

Ali: That’s wild.

Danielle: I feel like I totally get the ruling on this case, I just feel like the whole like verbal smell, oh, it’s the sea air, versus like, oh, it’s a Musky smell, like that is crazy.

Cassie: That was what the whole case came down to.

Danielle: So, they got 275,000 from the brokerage? Dang.

Cassie: And their want to rescind was not dropped because that was obviously from the contractor, and they would’ve had to have gone after the contractor for that.

Danielle: Interesting. 275,000 for a comment.

Ali: God, I joke too much.

Cassie: Stress.

Ali: Literally, this whole time I’m like replaying little antidotes of things that I’ve said where I’m just like, uh oh.

Danielle: Leave it vague, but then again it goes back to like, who remembers it correctly.

Ali: Every time I make a comment I’m like, well, I think it could be this. It’s never like, oh, this is what that is.

Danielle: Which I do get. I think that was wrong, whether he could smell it or not, or whatever happened, but man, yeah, that was what the whole case came down to.

Ali: IImagine that realtor having a great day, like opening the bay windows and saying “it’s just the sea air,” thinking this is like the most wonderful day. What a great showing. And then later it’s like, dang, we viewed that situation very differently.

Cassie: I’m sure if you work out there in a Bay area or ocean front area, you are smelling homes that have a musty sea air type smell. You just can’t say that. That’s what the smell is when you show it when you don’t know for sure.

Danielle: Wow, you know that there was no harm meant in that little comment and those like few words were everything in this case.

Ali: Also, at the same time, I feel so bad for that buyer because what a mess of the situation they got into.

Danielle: Absolutely, it was a mess, but it’s one of those things that are really hard, like you just never fully know unless it’s brand new construction and it was like a new builder who’s had to disclose everything. Otherwise, you don’t know what’s on that property when the home is like a hundred years old, because they did things and there were so many different rules and laws back then. They didn’t have to do things to the same degree. Code was different. Everything, and so an oil tank buried on the property may have been a really common thing in the 50’s or 60’s, so it wasn’t a big deal. I don’t think there were any seller disclosures in any state at that point, so no one had to disclose.

What kills me in this case is that the contractor they hired, whether they gave him a verbal okay or not to cut that, you wanna hire someone who’s a professional and deals with oil tanks. You know what I’m saying?

Cassie: Someone that knows not to cut a pipe that’s gonna run oil to your house through the soil.

Danielle: That’s crazy to me.

Cassie:I wonder what that whole conversation held, because it obviously stuck in at least the buyer’s mind enough that they could remember it so well, and I wonder if it was more in depth than just, it’s just the sea air, and maybe they were really concerned and he’s like, oh, no, no, no, no, no. Don’t even worry about it. All the houses out here smell like that. It’s just the sea, and that’s the only part they included.

Danielle: I can see that. Or I can see the opposite. I can also see when people get stuck on one thing that’s said, and then they’re like, oh no, that’s like, remember trying to find blame.

Cassie: I don’t know. It’s a wild one. Ali looks stressed.

Ali: The mix between my coffee and this story is making me anxious.

Danielle: I talk too much. I don’t even know what I say sometimes.

Cassie: I just try to never make definitive statements about anything.

Danielle: I think that that’s like, honestly, unfortunately, kind of how we have to be, because I, we don’t know, and I think it’s so great to point people in the right direction and also make sure we’re not speaking outside of what we know. I think this is just a really good reminder of that.

Ali: See, my thing is I don’t speak outside of my knowledge, but then this all comes back to perception, which is the scary part for me. I know that I am not doing anything wrong and being careful in the moment, regardless of whatever joke or whatever, but you look back in two years, are they gonna remember the infliction of your voice or if you kind of like elbowing them or like laughing afterwards?

Danielle: Very true. I was thinking too, like something like this where they’re like, oh, what is that musty smell? It would be better if you’re like I don’t smell that. I can’t smell since I have covid, and I’m like, I, but I think that’s a better response than, oh, it’s this?

Ali: Some people have really, really sensitive noses. I’ve been on showings with people where they bring up a smell and I’m like truly trying to smell what they are talking about.

Cassie: I have a nose like that. I can smell something that nobody else can smell from.

Ali: I know it’s silly, but sometimes when people can smell something that I don’t smell, I’m like, oh, great, they think that I don’t know what to look for with my nose. I’m like, no, my nose just can’t find it.

Danielle: Well, this is a good lesson.

Cassie: I was surprised at how it ended up shaking out. I just felt like it was just that comment that determined the whole case.

Danielle: And now they have a house that’s unlivable. I mean, I’m hoping insurance stepped in.

Cassie: It’s hard to know, or whether the contractor’s insurance covered it because I don’t know how much they purchased the home for, but if it’s oceanfront in 2008, 275 is not cutting it. If you’re having to tear it down and then buy a new property, you’re paying for all the costs to tear it down.

Danielle: I forget what some of the rules are, but I know if there is a gas spill and stuff, like it’s like 50 to 100 years, a long time that you cannot build another building on it.

Cassie: Is there gonna need to be some sort of environmental protective work done that the city’s gonna require to make it not then affect outlying areas too.

Ali: Well you think it’s freaking on the water.

Cassie: I just feel like they stepped into so much more than they could have known, and whoever they hired as a contractor did not know what they were doing to cut the pipe.

Ali: Like, wouldn’t he think like, I can cut it and cap it, but how do you know what’s in there? How are you so confident that it’s empty? Like verbal or not, how are you, as a contractor, comfortable doing this?

Cassie: If there’s anything in it, there’s no way you’re gonna be able to cap it fast enough that nothing gets out. Maybe they were just hoping they could cap it really quickly, but no luck.

Danielle: Oh, what a terrible day for all those people.

Cassie: I know. Rough times. Don’t trust your nose statements. Musky may not mean salty sea air, or BO.

Ali: Enjoy your noses.

Make sure to follow us on Instagram and TikTok. We are at Agents Unfiltered. Have a lovely day. Bye.