NW ARKANSAS Focus : Buyer’s sex record worries neighbors
Posted on Sunday, February 20, 2005
URL: http://www.nwanews.com/adg/News/108458/
A deal that looked at first like a typical real estate transaction in the high-growth Northwest Arkansas housing market has turned into a battle headed to the courts in a new kind of case in the region.
A husband and wife looking for a home closed a deal on a new house in one of Northwest Arkansas’ many new subdivisions, just like hundreds of other couples. Except this husband is a registered sex offender.
NGI Rental of Rogers, a developer worried about a "mass exodus" at one of its subdivisions now that a highrisk sex offender has moved in, sued Randall Dee Collins, his wife and their real estate agent, claiming they should have disclosed that Collins is a convicted sex offender.
The lawsuit is a legal move new to Northwest Arkansas.
NGI said it’s losing money because buyers are backing out of home purchases in the Silverstone subdivision. Investors in the 94-lot subdivision in northeast Springdale are fretting, too.
The lawsuit, filed this month in Benton County Circuit Court, underscores a prickly legal question: Are parties in real-estate transaction required to disclose when a sex offender is involved or lives nearby?
NGI claims that Randall and Carmen Collins and their Realtor, Claudia Rodriguez, were obligated to disclose Collins’ sex-offender status in good faith.
The Collinses and Rodriguez deny the claims in the suit, and the Collinses have countersued, alleging harassment.
Rodriguez stated in court filings that NGI is trying to "bootstrap" a duty upon her and real estate agents that doesn’t exist under Arkansas law.
Matt DeCample, spokesman for the Arkansas attorney general’s office, said under Arkansas law no one but the police is required to notify others about where a registered sex offender lives.
Andy Schaus, executive officer of the Arkansas Realtors Association, said there’s no law requiring Realtors to disclose the information.
But real estate agents do deal with sex offender disclosure on contractual forms and in written agent/buyer/seller agreements.
Schaus hears from Realtors in a quandary primarily when a seller they represent has a sex offender for a neighbor. "We’ve haven’t dealt with anything in the direction of this lawsuit before," Schaus said. "I’ve never heard of a situation where the buyer, himself, is the sex offender. This took us by surprise. How does a Realtor handle it? Yikes."
Paula Stitz, manager of the State Sex Offender Registry and a member of the assessment group, said Arkansas has about 5,000 registered sex offenders. Some of them complain that they’re stigmatized or squeezed out of neighborhoods after notification, while neighbors complain property values are diminished by a sex offender’s presence. "You’re building your dream home, and you find out that there’s a sex offender living in the middle of your neighborhood," Stitz said. "To you, it seems like that’s the only sex offender in the whole wide world. But in reality, all sex offenders live somewhere."
OZARK OFFENDERS Randall Collins, 39, was convicted in Washington County in 1996 of first-degree sexual abuse, court records show. He molested two sisters, 10 and 12.
When the girls tried to avoid him, Collins popped a screen off their window and climbed into their house. He was sentenced to 10 years in prison, records show.
Collins is one of about 50 registered sex offenders in Springdale, police said. The Arkansas Crime Information Center says 229 registered sex offenders live in Benton County, and 329 live in Washington County.
Collins has been assessed and classified a Level 3 offender. The classifications are: Level 1, low risk; Level 2, moderate risk; Level 3, high risk; and Level 4, sexually violent predator.
Level 3 and 4 offenders are banned from living within 2,000 feet of a school or day-care facility. Police must notify neighbors living in a certain proximity of Level 3 and 4 offenders, as well as schools, churches and other pertinent people and groups.
Neither Randall nor Carmen Collins responded to a note seeking comment for this article left at their home last week. Their attorney, Ken Swindle of Rogers, is in South America, his answering machine said.
NGI claims that Carmen Collins hired Rodriguez to sell her home after she married Randall Collins. The home was within 2,000 feet of a school.
Rodriguez, an agent with Capital Realty Group in Lowell, found a home at 3764 Grainger in Springdale’sSilverstone subdivision, and the Collinses made an offer, according to the suit.
NGI claims that Rodriguez and the Collinses omitted his name on a home loan application to conceal his sex offender status. Instead, Randall Collins’ mother, Shirley M. Colunga, cosigned for the loan.
The suit claims that the day after the Collinses closed on their home, police passed out notification flyers.
Since then, buyers have reneged on contracts to purchase homes in Silverstone, NGI claims. The company worries about a "mass exodus," according to the suit.
Juan Acosta bought his home in Silverstone a year ago for $129,000. Now, homes there cost about $132,000, he said.
Acosta, 25, a mortgage lender in Bentonville, suspects NGI will end up lowering home prices in Silverstone because a sex offender lives there.
Acosta figures the value of his home will take a hit, too. "[Collins has] paid his debt and everything," Acosta said. "But there’s a good possibility his presence here will affect my market value."
NO OBLIGATIONS Schaus said real estate agents in Arkansas aren’t obligated by law to investigate whether a sex offender lives in the neighborhood. But if they represent a seller who knows, Schaus said they should disclose that information to potential buyers. Seller disclosure forms developed by the Arkansas Realtors Association don’t include specific language for sex-offender information. But a general section requires disclosure of conditions or facts that could adversely affect the value or desirability of a property.
Schaus said that the buyer disclosure form specifically addresses sex offenders. It tells a buyer to inquire with police or Arkansas’ sex offender registry Web site if he wants to know whether an offender lives in a neighborhood. "This puts more of the burden on the buyer," Schaus said.
That’s in trend with the National Association of Realtors’ position, said Stephen Cook, the group’s vice president of public affairs.
Buyers should be the ones to seek out sex offender information, and they should get it from law enforcement, he said. "Police are much better authorities on the matter than real estate agents are," Cook said.
But what happens in a case like Collins’, where the buyer is married to the sex offender?
Alicia Demarest, a vice president with Griffin Company Realtors in Springdale, said real estate agents who represent buyers are bound to protect their interest and confidentiality.
Demarest is not a part of the Collins lawsuit. But, she said, NGI’s claims against Rodriguez appear to conflict with the basic premise of the real estate agent/buyer agreement. "A buyer’s agent is bound by agreement to work on behalf of the buyer and to protect their interest," she said. "That includes not disclosing anything that could negatively impact the buyer in the sale."
Demarest said she’s listed homes in Northwest Arkansas neighborhoods where sex offenders live, and their presence affects marketability. "Unfortunately, the situation negatively impacts every resident in the neighborhood except the sex offender," she said. "That’s why people are so upset. They have no control over who lives in their neighborhood."
DIDN’T KNOW STATUS Rodriguez said she didn’t know that Randall Collins was a sex offender until after the sale of the new house at 3764 Grainger. A Coldwell Banker real estate agent called Rodriguez days later and asked if she knew that Randall Collins was a sex offender. "I responded No!" Rodriguez said in a court affidavit. "I was as shocked as she was." Rodriguez denied circumventing Randall Collins on the loan application in order to conceal his sex-offender status. The bank wouldn’t work with Randall Collins’ credit, so Colunga, his mother, co-signed, Rodriguez said. "What happened to me could happen to any agent," Rodriguez said Friday. "I didn’t know that Randall was a sex offender, and that’s that. But even if I did, there’s no law, nothing in real estate regulations that says I have to say it."
NGI declined comment for this article. Thomas D. Stockland, company attorney and registered agent, referred questions to a company manager, Trey Trumbo. A message left for Trumbo wasn’t returned.
In its suit, NGI claims that after the sale, Randall Collins demanded $250,000 from the company to leave the neigborhood.
Randall Collins tried to force NGI to pay him to move, the suit alleges.
Stitz said some high-risk sex offenders feel shunned after police make notification in their neighborhoods, so they move. "Moving is one of the biggest challenges in notification," she said. "The more they move, the more police have to notify. It’s a Catch-22."
In their countersuit, the Collinses said NGI should ask for sex offender disclosure from buyers on its application forms.
NGI’s lawsuit is in bad faith and intended to harass, the countersuit claims. The Collinses claim stacks of bricks blocking the sidewalk in front of their home is proof.
NGI told the Collinses it would do whatever "necessary" to make the couple move, according to the countersuit. NGI offered to pay the Collinses $2,500 to relocate, but they refused.
The Collinses claim that NGI held a neighborhood meeting to discuss having them "removed" from the subdivision.