Is it legal for a realtor to call another realtor and tell them that there are deed restrictions on a home they are selling when there’s not?

A realtor in KY called another realtor about a house that he was selling for a
client and tried to say that there were income restrictions on the home since the
current owner had a USDA rural development loan. This information was false, it
this legal for a realtor to do?

Asked on January 11, 2019 under Real Estate Law, Kentucky

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

If the information was true, it would have been legal: anyone may disclose any true information they are aware of to any other person, if there is no court order or contract prohibiting disclosure. 
But because it was false and so represented a wrongful intereference in this sale, it 1) would likely be a breach of the realtor's professional ethics (he could be reported to the state RE licensing board); and 2) if the false disclosure caused the seller to lose a sale, the seller could likely sue for "tortious"--or wrongful--"interference with a contract" or "interference with economic advantage," to recover any costs or losses they incurred due to a sale falling through.


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