AGO Opinion 98051
Disclosure Requirements for Real Estate Licensees with Regard to Presence of Registered Sex Offenders
DATE: December 7, 1998
SUBJECT: Disclosure Requirements for Real Estate Licensees with Regard to Presence of Registered Sex Offenders
REQUESTED BY: Les Tyrrell, Director Nebraska Real Estate Commission
WRITTEN BY: Don Stenberg, Attorney General
Lynn A. Melson, Assistant Attorney General
You have requested the opinion of this office with regard to
the effect, if any, of the notification provisions of the Sex
Offender Registration Act on the Commission's enforcement of
existing statutes and regulations concerning disclosure of adverse
material facts and the Commission's adoption of future regulations
on the subject.
We will first review the relevant statutes and regulations.
We assume, by your questions, that your inquiries concern the duty
of a seller's agent to disclose certain adverse material facts to
a potential buyer. That duty is set out at Neb. Rev. Stat.
§ 76-2417(3)(a) (1996) as follows:
(3)(a) A licensee acting as a seller's or landlord's
agent owes no duty or obligation to a customer, except that a
licensee shall disclose in writing to any customer all adverse
material facts actually known by the licensee. The adverse
material facts may include adverse material facts pertaining
to: (i) Any environmental hazards affecting the property which
are required by law to be disclosed; (ii) the physical
condition of the property; (iii) any material defects in the
property; (iv) any material defects in the title to the
property; or (v) any material limitation on the client's
ability to perform under the terms of the contract.
The term "adverse material fact" is also defined at Neb. Rev.
Stat. § 76-2403 (1996) as follows:
Adverse material fact shall mean a fact not reasonably
ascertainable or known to a party which significantly affects
the desirability or value of the property to that party or
which establishes a reasonable belief that another party will
not be able to, or does not intend to, complete that party's
obligations under a contract creating an interest in real
The Commission has also promulgated regulations which define
the actions demonstrating negligence, incompetency, or unworthiness
under Neb. Rev. Stat. § 81-885.24(29) so as to include the failure
to disclose certain adverse material facts. 299 NAC 5-003.20
provides that one of the actions for which a real estate licensee
may be disciplined is as follows:
Failure to disclose, in writing, to a buyer, at or prior to
the time the buyer signs an Offer to Purchase, an adverse
material fact regarding the condition of a parcel of real
estate of which a broker or salesperson has knowledge. Said
written disclosure shall be signed by the buyer and a copy of
the signed disclosure shall be maintained in the transaction
file on that parcel of real estate in accordance with 299 NAC
3-001. An adverse material fact is one which significantly
affects the desirability or value of the property, and which
is not reasonably ascertainable or known to the buyer.
Our review of your current regulations reveals that the
Commission has not previously attempted to further define the term
"adverse material fact" or to list specific examples of facts which
must be disclosed.
You have requested our opinion with regard to the impact of
the Sex Offender Registration Act found at Neb. Rev. Stat.
§§ 29-4001 to 29-4013 (Supp. 1996 and LB 204, Laws 1998). The Act
requires certain sex offenders to register with local law
enforcement agencies and, as amended in 1998, authorizes the
Nebraska State Patrol to adopt rules and regulations concerning the
release of information concerning the registered sex offenders.
Neb. Rev. Stat. § 29-4013 provides for three levels of notification
depending on the risk of recidivism by the sex offender. If the
risk of recidivism is low, only other law enforcement agencies
likely to encounter the sex offender are to be notified. If the
risk of recidivism is moderate, notice will also be given to
schools, day care centers, and religious and youth organizations.
If the risk of recidivism is high, the statute also allows the
public to be notified by direct contact, news releases or a
telephone system. It is our understanding that the Nebraska State
Patrol has not yet promulgated regulations to implement the
notification provisions of the Act.
Finally, you state in your opinion request that it is likely
that real estate licensees "will gain actual knowledge of
registration information by virtue of their employment by or
affiliation with schools, day care centers, and religious and youth
organizations" and "will gain actual knowledge of registration
information as members of the public."
We will now address the questions which you have posed in your
1. Whether actual knowledge concerning a registered sex
offender, gained by a real estate licensee through the notification
provisions of LB 204, constitutes or may constitute an adverse
material fact under existing law?
First, we are answering your questions in the context of the
Commission's role in disciplining real estate licensees for
violations of Nebraska statutes and regulations. We are not
authorized to provide legal opinions to private citizens and are
not attempting to speak to the potential liability of real estate
licensees to buyers or other parties in the event they disclose or
fail to disclose knowledge regarding registered sex offenders. The
real estate licensees may wish to consult their own attorneys
regarding potential liability.
Accepted rules of statutory construction require that we
construe together all statutory components of an act so that
different provisions of the act are consistent and harmonious and
that we give greater weight to statutes which contain specific
provisions on the subject, rather than to statutes which are more
general in nature. State ex rel. Stenberg v. Murphy, 247 Neb. 358,
527 N.W.2d 185 (1995); AMISUB v. Board of County Comm'rs of Douglas
County, 244 Neb. 657, 508 N.W.2d 827 (1993). While Neb. Rev. Stat.
§ 76-2403 rather broadly defines the term "adverse material fact"
as one which "significantly affects the desirability or value of
the property to that party," we find Neb. Rev. Stat.
§ 76-2417(3)(a) to be the more specific statute with regard to the
duty of a licensee to a potential buyer. The presence of a
registered sex offender in the vicinity of the property listed for
sale does not appear to us to be included within the list of
adverse material facts found in § 76-2417(3)(a). It is doubtful
that the statutory list of adverse material facts would be
considered an exclusive list as the statute merely provides that
the adverse material facts required to be disclosed "may include"
the enumerated categories of facts. However, the statutory
categories of facts which must be disclosed pertain to the
particular property listed for sale and its condition or defects
rather than to neighborhood circumstances such as crime rates, use
of nearby properties or the identity of particular neighbors.
Therefore, while the statutory list of facts to be disclosed may
not be exclusive, we think it likely that a court would construe
"adverse material facts" to include factual circumstances of the
same type as those listed and not circumstances pertaining to the
This interpretation is supported by the statutory construction
doctrine of ejusdem generis which "gives effect to both the
particular and the general words, by treating the particular words
as indicating the class, and the general words as extending the
provisions of the statute to everything embraced in that class,
though not specifically named by particular words." Belanjer v.
Warren Consol. School Dist., 432 Mich. 575, 443 N.W.2d 372 (1989).
Stated another way, specific words or terms modify and restrict the
interpretation of general words or terms where both are used in
sequence. See Boersma v. Karnes, 227 Neb. 329, 417 N.W.2d 341
(1988); Kuntzelman v. Avco Financial Services, 206 Neb. 130, 291
N.W.2d 705 (1980).
We have found no Nebraska cases which discuss or further define
adverse material facts in this context. We also note that the
rules of statutory construction discussed above are only aids to
interpretation and a court would not be bound by those rules.
Therefore, we have no clear answer to your first question.
However, it does not appear that the legislature intended the term
"adverse material facts" to include circumstances in the
surrounding neighborhood of a property listed for sale.
2 and 4. Whether the Real Estate Commission has the authority
under existing law to require a real estate licensee to disclose
his or her actual knowledge concerning a registered sex offender,
gained through the notification provisions of LB 204, to a
potential buyer of real estate at the time or before the buyer
enters into an Offer to Purchase real estate?
Whether the Real Estate Commission has the authority, pursuant
to Neb. Rev. Stat. § 81-885.07(5) and § 76-2430, to adopt
regulations which exclude some or all of a licensee's actual
knowledge concerning registered sex offenders, gained through the
notification provisions of LB 204, from required disclosure to
buyers as an adverse material fact, or to adopt regulations which
are otherwise consistent with LB 204 and its implementing
As it is impossible for the legislature to specify all
regulations which are necessary for an agency to achieve the
legislature's purpose, the legislature may delegate to an
administrative agency the power to make rules and regulations to
implement the policy of a statute. Administrative boards and
agencies may express their interpretation of laws they are charged
with administering through the rulemaking procedure. "The primary
function of a regulation is to interpret an ambiguous statute and
clarify its meaning." Northern Natural Gas Co. v. O'Malley, 277
F.2d 128, 134 (8th Cir. 1960). Yet, an agency has only that
authority conferred upon it by statute and may not use its
rulemaking authority to modify, alter, enlarge or contradict the
statutory provisions the agency is charged with administering. In
re Application A-16642, 236 Neb. 671, 463 N.W.2d 591 (1990);
Cornhusker Christian Children's Home, Inc. v. Department of Social
Services, 227 Neb. 94, 416 N.W.2d 551 (1987); State ex rel. Spire
v. Stodola, 228 Neb. 107, 421 N.W.2d 436 (1988).
In this case the Commission has been given general authority
to promulgate regulations "to carry out Sections 76-2401 to
76-2430." Neb. Rev. Stat. § 76-2430. The Commission may also
promulgate regulations "relating to the administration of but not
inconsistent with" the Nebraska Real Estate License Act. Neb. Rev.
Stat. § 81-885.07(5) (1996).
While the Commission arguably has general authority under
§ 76-2430 to flesh out and interpret the statutory provisions
pertaining to adverse material facts, in order to be valid, any
such regulation must be consistent with the statutes. For the
reasons stated in response to your first inquiry, it is certainly
questionable whether regulations regarding the disclosure of area
sex offenders would be deemed consistent with the intent of the
legislature expressed in § 76-2417(3)(a). In our opinion, the
better answer is that the Commission lacks authority for such
regulations. You also refer in your request to adopting
regulations "consistent with LB 204 and its implementing
regulations." As the Nebraska State Patrol has not yet promulgated
regulations pursuant to LB 204, we are unable to respond to that
inquiry at this time.
3. Whether a requirement by the Real Estate Commission that
a licensee disclose his or her actual knowledge concerning a
registered sex offender, gained under the notification provisions
of LB 204, to persons who would not otherwise be notified by law
enforcement officials under the provisions of LB 204, constitutes
state action which may affect the enforceability of the
notification provisions of LB 204?
We have contacted the Commission for a clarification of
question three. It is now our understanding that the Commission is
concerned that a requirement that licensees disclose their actual
knowledge regarding the location of sex offenders to potential
buyers of property may conflict with or usurp the notification
provisions of LB 204. The example furnished was a situation in
which a licensee obtains knowledge of a level two sex offender by
virtue of the licensee's position with a school, day care center or
religious or youth organization, and is then required by the
Commission to disclose that information to members of the general
public (buyers) who would not otherwise be notified of a level two
sex offender pursuant to LB 204. This potential conflict with the
intent of LB 204 lends further support to our previous response
that the Commission lacks clear authority to promulgate such a
5. and 6. Whether the Real Estate commission and its employees
are immune from liability for good faith conduct under Section
29-4012 of the Sex Offender Registration Act? Whether real estate
licensees, acting pursuant to Real Estate Commission regulations,
are immune from liability for good faith conduct under Section
Neb. Rev. Stat. § 29-4012 (Cum. Supp. 1996) provides that
"[L]aw enforcement officials, their employees, and state officials
shall be immune from liability for good faith conduct under the Sex
Offender Registration Act." The term "state officials" is not
specifically defined for purposes of the Act and our review of the
legislative history of the Act was not helpful. However, in our
view, the plain language of the statute provides immunity only for
those state officials with duties to perform under the Act.
As the Commission members and employees have no specified
duties or obligations under the Sex Offender Registration Act,
§ 29-4012 does not appear applicable to them. Further, as real
estate licensees are not state officials in any sense, § 29-4012
clearly does not apply to licensees.
The Commission's concern about whether information about a
neighborhood should be disclosed to potential home buyers is
understandable. Should home buyers be advised of the number of
residential burglaries in the neighborhood in the last year?
Should they be advised whether any drug dealers have been arrested
in the neighborhood recently or whether known drug dealers are
living in the neighborhood? Should they be advised about whether
any sexual assaults have occurred in the neighborhood recently or
whether a registered sex offender is living in the neighborhood?
On the one hand, perhaps a real estate sales person should advise
a perspective buyer about certain of these facts or about all of
them. On the other hand, perhaps the investigation into those
issues should be left to the home buyer. As we indicated, in our
opinion, if licensed real estate professionals are to be required
to make these types of disclosures, then it will be necessary for
the Legislature to act to authorize the imposition of these
Lynn A. Melson
Assistant Attorney General