by Thomas V. Bennett
A decision of the Supreme Judicial Court decision (the Commonwealth's highest court of appeal) clarifies what a seller of real estate is required to disclose to the buyer. This particular case involved suit by the purchaser of a condominium residential unit against a bank which was the seller. The purchaser claimed that the bank failed to disclose certain environmental conditions existing in the area in which the condominium was located, charging that the bank engaged in fraud and deceit and violated consumer protection laws in that failure to disclose.
On the way to the decision, the court paused to review what a seller is required to disclose. The court noted that a seller of property is not under any obligation to disclose defects to the buyer in absence of a fiduciary duty. Silence does not constitute a basis for claiming fraud or misrepresentation, even when the seller may have knowledge of some weakness in the subject of the sale and fails to disclose it. Such non- disclosure does not amount to fraud and is not a conventional tort at any kind. The court held that the bank owed the purchaser no duty under common law to disclose the minimum amount of information it knew and as a matter of law, was not liable for fraud or misrepresentation.
Since the seller was a bank, it would be subject to the more stringent requirements of M.G.L. c.93A, since it is engaged in a trade or business. That normally does not apply to the ordinary seller of a residential piece of property where it's their home. The claim of violation was that the bank had failed to disclose to the buyer a fact, the disclosure of which would have influenced the buyer not to enter the transaction. The court noted that although there are a series of cases where a seller has been held liable under G.L. c.93A for non-disclosure of actual defects existing on or directly affecting the property, the plaintiffs claim by contrast concerned an off site problem that no longer existed.
The lower court judge characterized the plaintiff's claim as an assertion that "they bought into a bad neighborhood and there was a vague undocumented possibility that TCE may somehow seep into their property in the future." The court found that the bank was not liable for the failure to disclose. The court noted that the case did not turn exclusively on the fact that the alleged problem was off site, although that was a factor to be considered. The court noted in appropriate circumstances, off site physical conditions known to a seller who is subject to G.L. c.93A may require disclosure if the conditions are unknown and not readily observable by the buyer and if the existence of those conditions is of sufficient materiality to affect the habitability, use or enjoyment of the property and therefore render the property substantially less desirable or valuable to an objectively reasonable buyer. Examples involve cases where a subdivision was near a highly toxic, active and hazardous waste dump site and where a developer failed to disclose to a buyer that it had previously arranged with a local conservation commission to release a conservation restriction on an adjoining parcel of land.
In this case, the remediation had been completed and the court held the bank was not liable based on the limited state of knowledge possessed by the bank, the past nature of the condition and the fact that it had not affected the condominium at all.Although there are certain disclosures that a seller is required to give with respect to residential property, for instance, the existence of the lead paint law and the right to inspection and the requirement to disclose the presence or absence of urea formaldehyde foam insulation, the seller would not otherwise be required to disclose anything unless the buyer asks a question and the seller makes a representation or answer with respect to such question. This case may also be helpful to brokers, who are subject to G.L. c.93A, since the case makes it clear that only facts which are material and known to the seller and broker but not known to the buyer would give rise to liability.
Very informative article, Which you have shared here about the Real Estate. I will share it with my other friends as the information is really very useful. Keep sharing your excellent work. homes for sale Bronx NYReplyDelete
You have shared a nice article here about the real estate. After reading your article I got very much information about the real estate selling and it resolved many of my doubts. Cheap Homes For Sale Dallas TxReplyDelete
It's a decent post, Which you have shared here. Your blog is enlightening and I truly loved the manner in which you communicated your perspectives in this post. Thank you for sharing such blogs. Real Estate Valuation DubaiReplyDelete
You have done good work by publishing this article here. I found this article too much informative, and also it is beneficial to enhance our knowledge. Mortgage Brokers Los Angeles Grateful to you for sharing an article like this.ReplyDelete
I generally check this kind of article and I found your article which is related to my interest.South Granville Top Realtor Genuinely it is good and instructive information. Thankful to you for sharing an article like this.ReplyDelete
A very delightful article that you have shared here.Transaction Coordinator Services for Real Estate Your blog is a valuable and engaging article for us, and also I will share it with my companions who need this info. Thankful to you for sharing an article like this.ReplyDelete
Thanks for your post. It's very helpful post for us. You can also visit builder dublin for more Victor Steel related information. I would like to thanks for sharing this article here.ReplyDelete
Thanks for publishing such excellent knowledge. You are doing such a good job. This info is very helpful for everyone. Keep it up. Thanks. Read more info about Social Network For Real EstateReplyDelete
I just had to say this is a wonderfully shaped article as we have seen here. I got some data from your article and besides it is a colossal article for us. Appreciation for sharing an article like this.Port Alberni Real Estate AgentsReplyDelete
Your blog took to me a totally basic spot. It is a significant and veritable article to overhaul data. Appreciation for sharing an article like this.Capilano house for saleReplyDelete
You are giving such interesting information. It is great and beneficial info for us, I really enjoyed reading it. Thankful to you for sharing an article like this.3d real estate photographyReplyDelete
You composed this post cautiously. How much data is staggering and furthermore a productive article for us. Continue to share this sort of articles, Thank you.Real Estate Coos BayReplyDelete
Parts produced via CNC machining generally start out as preliminary designs from Computer Aided Design software. When you ask where your parts will be made, certain to|make certain to|remember to} ask about post-processing, too. Machine retailers generally outsource these companies to third-party distributors (although we now have a bunch of in-house post-processing precision machining companies here at KAD).ReplyDelete