Legal Question in Real Estate Law in Ohio

Fraudulent seller property disclosure?

Bought a house this January - seller disclosed she knew of prior leaks/seapage and/or damage due to water. Explanation she wrote was ''spots from old leaks.'' Because she had it re-roofed in 2004, we were told by our real estate agent that this had taken care of the ''spots'' we saw. Heavy rains caused water leaks from the same exact ''spots'' in ceiling - many places. Called the same roofing contractor - he said he told her the new roof wasn't going to stop the leaks - the missing pieces of siding was the cause. The neighbor also said he told her several times that the leaks she knew about were NOT caused by faulty roofing job, but by the missing siding. Called home inspector - said he would NOT have been able to tell this unless there were extremely heavy rains similar to the ones in Ohio just last week. Is this fraud, and do I have a possible suit against seller?

Asked on 6/28/06, 2:40 pm

2 Answers from Attorneys

James Magee James V. Magee, Jr., Attorney at Law

Re: Fraudulent seller property disclosure?

You may have a case against your seller for fraudulent misrepresentation based upon the misrepresentations as to the water leak and the corroborating testimony of the roofer

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Answered on 6/28/06, 3:10 pm

J. Norman Stark J. Norman Stark , Attorney, Architect

Re: Fraudulent seller property disclosure?

Dear Defrauded Purchaser,

Yes, based on the facts you presented, it appears that you do have a good basis for an action (lawsuit) against the seller for intentional misrepresentation tantamount to fraud.

Ohio's Seller's Disclosure Statement requires an honest representation of all facts and deficiencies in the property being sold, unless the contract states it is being sold "AS IS".

It may be unfortunate that you or your privately hired home inspector failed to properly inspect the property before purchase and failed to note any visible signs of defects.

The Supreme Court of Ohio, considering latent defects (hidden from view), decided: “With respect to latent defects, Ohio follows the doctrine of caveat emptor if the defect is one that is discoverable by a reasonable inspection, there is an unimpeded opportunity to inspect the premises, and there is no fraud by the seller.” Layman v. Binns (1998), 35 Ohio St.3d 176, 519 N.E.2d 642.

However, “Sellers may not actively misrepresent the condition of a property or actively conceal defects. *** Put another way, fraud “trumps” an “as is” clause, and the purchaser may proceed with a lawsuit.” Donnelly v. Taylor (2002), 122 Ohio Misc.2d 24, 2002-Ohio-7461, 31, para.34.

“The elements of a cause of action for fraudulent misrepresentation or concealment are (1) a material false misrepresentation or a concealment, (2) knowingly made or concealed, (3) with intent of misleading another into relying on it, (4) reliance, with a right to rely, on the misrepresentation or concealment, and (5) injury resulting from the reliance. Gaines v. Preterm-Cleveland, Inc. (1987), 33 Ohio St3d 54, 55, 514 N.E.2d 709.” Donnelly, id., at p.29, para.23.

I strongly urge you contact an experienced real estate attorney to represent you and to evaluate any potential case.

Good luck!.

Sincerely, J. Norman Stark

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Answered on 6/29/06, 7:30 am

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