Sellers' Communications with Buyers
In communicating with prospective purchasers of their property, sellers
are not permitted to induce such prospective purchasers to forego
investigation of the property. In other words, when the parties
deal at arms length, the rule very nearly remains “buyer beware.”
The one exception is when a seller speaks regarding the acreage of the
property. When a seller is incorrect in stating the acreage of
property, he or she is more vulnerable to being held liable for
misrepresentation. Also, when sellers do voluntarily speak about
their property, they must speak honestly, and sellers must be on guard
not to conceal defects in the property.
Here is an example of the rules in practice.
Knowing of wells going dry in the neighborhood, some prospective buyers
asked a seller if her well provided adequate water. The seller
responded she always had plenty of water. After closing, the
buyers discovered the water supply was grossly inadequate. The
court held the seller did not commit fraud because the buyers knew of a
potential problem, received a vague answer from the seller, and failed
to investigate by even turning on a faucet during their inspection.
I hope this information assists you in advising your seller clients.
Do
not hesitate to contact me to receive more information on this topic or
to suggest topics for future editions of 'A Legal Moment'. You may not
rely on this content as legal advice for any specific situation, but
should instead contact an attorney for specific advice.
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