Bad Zillow info ‘corrupted’ listing price on $150M mansion: Suit

By Andrew V Brambila posted February 26th, 2019 on inman.com

Once the most expensive listing in the US, the Bel Air mega-mansion was incorrectly listed as sold multiple times.

The seller of one of the nation’s most expensive real estate listings is suing real estate giant Zillow Group for $60 million in damages, alleging the company was negligent when it allowed a “troll” to falsely claim they were the homeowner of the listing on Zillow and then posted inaccurate information about the property.

The listing, 924 Bel Air Road in Los Angeles, was first listed for $250 million in 2017 and cut to $188 million last year before coming back on the market at a $150 million price in January. Luxury home developer Bruce Makowsky built the 38,000-square-foot, 12-bedroom, 31-bathroom home, which he called “Billionaire” and declared to be his “greatest masterpiece.” The home features a helipad, bowling alley, movie theater, a candy wall, an 85-foot infinity pool, a massage studio and 270-degree unobstructed views of the Los Angeles skyline, among other amenities.

In a lawsuit filed on Feb. 24, the plaintiff, a company owned by Makowsky, alleged Zillow published false information about the property that was uploaded by someone claiming to be the listing’s owner. This included claims that the home had sold on Feb. 9, 2019 for $110 million, that there was an open house for the property on Feb. 8, 2019 from 1-4 p.m., that the property sold on Feb. 9, 2019 for $90.54 million, and that the property sold on Feb. 9, 2019 for $93.4 million.

“Zillow is disseminating misleading, false, and inaccurate information that has a large prominence because of Zillow’s market power,” attorneys for the plaintiff wrote in the complaint.

“Brokers, agents, and real estate colleagues wrote to and called Plaintiff’s agents to congratulate them on the sale of the Property when, in fact, it had not been sold. Zillow published this false information on multiple occasions after being told the property had in fact, not been sold.”

The plaintiff’s attorneys alleged that it took Zillow more than a week to take down the false information and false claims of ownership, despite Zillow acknowledging it was “aware of the issue.”

“As a direct and proximate result of Defendants’ negligent conduct, Plaintiffs have not been able to sell the Property. Nor can Plaintiff properly market and advertise the Property. Additionally, by labeling the Property sold numerous times millions of dollars below the listing price corrupts the listing price dramatically,” the complaint said.

Zillow unveiled its “Owner Dashboard” allowing homeowners to edit listings in April 2016. The site also receives listing data from multiple listing services, brokers, and public records.

The complaint includes a string of emails between an attorney for the plaintiff, Ronald Richards, and Kim Nielsen, Zillow’s senior corporate counsel, in which Nielsen explains that “Any home on our website can be claimed by the homeowner. There are a series of questions that must be answered, but if someone attempts to claim it enough times, they will know the questions asked (and be able to figure out what information they need to verify their identity.”

She added that “Our verification process is not manually reviewed by an individual each time, and the person who claimed the home was able to get around some of our standard required information, such as name and phone number.”

In a statement, a Zillow spokesperson said the company makes a big effort to ensure data accuracy on Zillow.com. The company is currently in the process of replacing the manual data entry system with a more automated system as it gets more sold data directly from MLSs.

“While we won’t discuss pending litigation, I can tell you that Zillow goes to great lengths to display current and accurate data on our site,” Kate Downen, the spokesperson, said. “When we hear about any issue, we work to resolve the issue as soon as possible.”

The complaint alleges that Zillow and unnamed defendants knew or should have known that someone could falsely claim ownership of a property and post false information, but “have done nothing about it and simply do not care about the homeowners they hurt in the process.”

“Defendants were negligent in that they do not have safeguards in place to prevent internet trolls, criminals, or persons designed to commit illegal acts from logging into their system to post the false information,” the complaint said.

“They do not have safeguards to prevent fake accounts with fake emails and fake phone numbers from publishing false information on their website.”

According to the complaint, the person posing as the listing’s owner provided a phone number with an area code that doesn’t exist.

“Zillow presently has inadequate screening procedures relating to who can claim they are the owner of the property which then entitles them to falsely claim a person or entities property is sold,” Richards told Inman via email.

His client hopes that, at minimum, Zillow will start to require real phone numbers and real email addresses from people claiming to be a listing’s owner, Richards added.

“This complaint is about careless business practices that harbors criminals, cheats, illegal persons designed to ruin a property’s value, not about free speech or user reviews. Zillow simply does not have safeguards in place to prevent who can falsely report this information nor does it safeguard false reporting. It is simply astounding that on three separate occasions it could falsely report errors totaling over $60,000,000,” the complaint said.

The complaint alleged Zillow owed the plaintiff “a duty of due care.”

“Public policy clearly supports imposing a duty of care on Zillow, as the market leader in the online real estate database space, which consumers rely on for real estate information,” the complaint said.

Listing agents Branden and Rayni Williams of Hilton & Hyland and Shawn Elliot of Nest seekers International did not respond to a request for comment by publication time. We will update this story if and when we hear back.

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