Aruban broker liable for erroneous disclosures

The Court of First Instance of Aruba held that a broker liable is for damages suffered by a purchaser (ECLI:NL:OGEAA:2025:255). Those damages, according to the court, stand in direct causal link to the incorrect disclosures made by the broker to the buyer. The ruling is under Aruban law, but as with the right to Curaçao, the parallels with Dutch law are great.

Property touted as ‘suitable for rental’

The buyer in question (SB Real Estate Aruba) was looking for a property to rent out to tourists. She approached KWA to look for it for her. Broker KWA pointed SB Real Estate to an available property. This, by the way, without mentioning that she was also acting as a selling broker. Later, KWA as the selling broker made several announcements about the property, including the average rent per night. SB Real Estate purchased the home for an amount of Afl. 1,349,240 (approximately €650,000).

Bank refuses financing due to rental ban

After the purchase agreement was made, the bank learned that the property was in an area where vacation rentals were prohibited. There was no permit for vacation rentals and one could not be obtained. The bank refused financing for that0m. SB Real Estate then sold the purchase agreement rescinded. She claims damages from the broker.

General Court of Aruba: broker liable for misleading statements

The judge considered:

“A selling broker acts unlawfully towards a prospective buyer if the broker does not exercise towards the buyer the care that may be expected of the broker in the circumstances of the case. This can be the case, among other things, if the broker provides the prospective buyer with incorrect, misleading or incomplete information prior to the sale about characteristics of the property which he must understand could be important for the (involved) buyer in his purchasing decision.”

The judge further found important that the buyer may believe the communications of a broker.

Communications broker attributable to sellers?

The communications from the broker, were not attributable to the sellers. Therefore, the seller is not liable, but in this case only the broker. However, there is own fault. The buyer could have known that there was no permit for the rental and that rental was not possible at all. Therefore, 25% of the damages remain for his own account. All in all, the broker must pay damages of Afl. 42,170.71 to the buyer (approximately €20,000), plus an amount of Afl. 8,100 to legal costs.

‘Court ruling shakes up Aruban real estate industry’

The ruling is reminiscent of a real estate agent from ’t Gooi who, according to the NVM's disciplinary judge, had acted culpably by concealment of a rental ban. The Caribbean newspaper Amigoe headlines that the ruling shook up the Aruban real estate industry. Apparently, then, the ruling has caused some surprise there. It is even written that the ruling “far-reaching implications for the Aruban real estate industry” and a “broad impact” has. This is because it is the first time in Aruba that the courts have explicitly found that providing misleading information, can lead to liability of the broker towards the buyer. Even if that broker represents not that buyer, but the seller.

Is the ruling really that groundbreaking?

According to Amigoe, it is a milestone that it has been ruled that commercial interests do not outweigh truth and transparency. To prevent repetition of misleading statements by brokers, guidelines should be developed, the newspaper said. This is surprising. In my opinion, the ruling should not cause surprise. Partly in view of the fact that the rule that is applied has also been commonplace in the Dutch Caribbean for years. Moreover, it is only logical that making incorrect statements can lead to liability if you know or should know that what you are telling is not true.