Holes in log cabin inspection not seller's fault. Read about the court case.

[size=2]Issue Date: RealLawCentral.com - Jan. 7, 2008, Posted On: 12/18/2007
Case Law

Holes in log cabin inspection not seller’s fault An infested log cabin caused headaches for a seller after the new owner claimed that the need for pest extermination and property repairs had been intentionally concealed, despite the fact that the parties had both been present for the inspection. Read on to learn who the courts sided with.

A homebuyer in Connecticut who allegedly relied on an independent inspection report but later found additional defects on the property can’t hold the former owner liable for repair costs, the Superior Court of Connecticut ruled on Nov. 19.

The claims stemmed from the purchase of defendant Karen Baker’s Hamden, Conn. home by plaintiff Meghan M. Hudson in 2003. Before purchasing the 18-year-old log cabin home, Hudson obtained a residential property disclosure report dated Feb. 24, 2003. She hired Above Grade Home Inspection Services to inspect the house on May 12, 2003.
The inspection report noted rodent droppings in the basement, carpenter bee damage on front boards of the house, some rotten logs along one wall, damage to two or three window sills and a failed seal and rotten wood on a skylight in an upstairs bathroom. The skylight would require close monitoring and patching and repairing as needed, the report noted.
An inspector checked the roof from the ground and the windows, using binoculars. He noted the “typical” gaps and cracks that would require sealing “as needed.” Decay was indicated on a corner log, which Hudson was shown by the inspector, the court said.

During Above Grade’s inspections, both Hudson and Baker were allegedly present. Portions of the basement’s inspection were limited due to Baker’s personal belongings being in the way, Hudson claimed, but the court said no one asked Baker to move the items.

Covering repair costs
Hudson and Baker agreed to evenly split the cost to repair the skylight. Baker agreed to fully cover the costs to treat the carpenter bee damage, repair the decayed logs and fix the window trim. Baker and Hudson closed on the house on June 13, 2003.

Upon moving in, Hudson claimed she found rodent droppings that weren’t disclosed in the residential disclosure report. She also claimed that a mirror along a wall in the basement had been concealing a previously-repaired crack in the wall with apparent leakage. After moving a large plant from a sun room, Hudson allegedly found cracking and heaving in the floor. She also claimed she found carpenter ants in the kitchen.

After calling an exterminator, Hudson said the company told her it had treated the home in previous years for ants, carpenter bees and mice. Hudson said this information wasn’t provided in the disclosure report.

Disguised defects
Hudson claimed she had to make immediate repairs to the home, at a cost of $40,000, after she hired a contractor who allegedly found decay that threatened the house’s structural integrity. Baker’s concealment, omission or misrepresentation caused the plaintiffs to be misled and prevented them from discovering the defects, Hudson claimed.

Hudson filed suit on April 21, 2005, on four counts of misrepresentation.
The court noted that a residential property disclosure report doesn’t substitute inspection tests, and that the disclosure report notes that its statements don’t constitute a warranty.

Additionally, the inspection report included a statement which explained that older homes don’t meet the same standards as new ones, and suggested asking the seller about previous problems, repairs or concealed areas.

The court pointed out that although the inspector showed Hudson leaks in the basement, she continued with the closing without questioning the sellers about it. Hudson acknowledged that she didn’t send a copy of the inspection report to the Bakers, and that the Bakers never saw the issues raised in the report.

Proof of knowledge needed
The court explained that the Uniform Property Disclosure Condition Act requires a seller to provide a written report of the property’s condition to a prospective buyer. The report has to include a provision explaining that the information provided is limited to the seller’s actual knowledge. The statute also urges a buyer to have the property inspected by a professional before making a purchase.

Since the general statute is limited to actual knowledge, the court ruled that Hudson failed to meet the burden of proof that the defendants knew of the conditions the plaintiffs alleged.

The court noted that a suit for negligent misrepresentation requires a plaintiff to prove not only that a defendant made a misrepresentation, but also that the plaintiff reasonably relied on that misrepresentation. Although Hudson claimed that misrepresentations were made in the disclosure report regarding decay that threatened the structural integrity of the home, the court found that Hudson didn’t provide an expert to attest to that claim.

The second and third counts of Hudson’s complaint, alleging fraudulent misrepresentation and negligent misrepresentation, failed to convince the court that she relied on the residential property disclosure report, since she hired an independent contractor. The court also was unconvinced that the Bakers knowingly made misrepresentations about the house.
To prove fraud, Hudson was required to demonstrate that Baker made a false representation as a factual statement, that Baker knew the representation was false and that she made the representation as a means to convince Hudson to act upon it.

The court stated that Baker didn’t knowingly make false statements to persuade Hudson to buy the house. Additionally, Hudson didn’t rely on the disclosure report when offering to buy the property, the court said, but rather relied upon the inspector’s report. It thus found Hudson failed to meet the burden of proof for Baker’s liability, and ruled in favor of the defendant.

Meghan M. Hudson et al. v. Karen Baker et al.
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Nifty argument for your MIC program, right there.

yep. www.MoveInCertified.com

Suits like this are why my show is packed full of real estate agents: http://www.nachi.org/internachicore2007.htm

Nick if I can set it up for next year are you interested in Coming to Canada.

…Cookie

Love to.

Forget rodent droppings, forget the repaired crack! What about the $40,000 in repairs and how it was missed, what it consisted of.

Seeing a few carpenter ants doesn’t mean there’s an infestation by any means. Them ants get around and so do rodents. Are disclosures required to reveal past treatments or only current infestations?

Are major insect infestations causing 40 grand in damage difficult to see? You can hear them chew, you can see them fly, carpenter bees are about the size of bumble bees!

“typical gaps and cracks” in a roof? Sounds like it results in “typical pools of water on the floor and furniture typically soaking wet in the home”.

Contractors who will find and repair decay whether it exists or not or is a problem or not are not unheard of.

Sellers should discloses any WDO treatment. Bury potential buyers in paper, every repair, every invoice, every work order, every warranty, every receipt.