Pennsylvania courts have recently handed down several important decisions in the realm of real estate law that provide context for future cases. Below, I will talk about two significant cases that took place at the end of 2018.
- Is a homeowner legally required to disclose renovations to a residence at the time of sale?
In Medlock v. Chilmark Home Inspections, 2018 Pa. Super. LEXIS 952 (2018), the Gitomers had renovated the basement of their residence on 2004, but failed to disclose the renovation at the time that they sold the home to the Medlocks in 2014.
After the Medlocks moved in, they discovered extensive water damage, mold and rotting wood above the ceiling panels in the finished basement, and filed suit against the property inspection company arguing that it should have discovered the defects while conducting the property inspection. The inspector (Chilmark) joined the Gitomers asserting that they had violated the Pennsylvania Real Estate Seller Disclosure Law (RESDL) by failing to disclose that they had remodeled the basement. The inspector subsequently settled with the Medlocks, who in turn assigned their rights in the litigation to the inspector, who then proceeded against the Gitomers.
At trial, the court entered a verdict for the defendants, concluding they did not know nor should they have known about the ceiling water damage behind the panels. The trial court also determined that the Gitomers’ failure to disclose the 2004 basement renovation was not “actionable” as a violation under the RESDL and that, even if it was, the Chilmark parties failed to prove actual damages as a result of the violation.
On appeal, our Superior Court found that that trial court did err by not concluding that the Gitomers’ failure to disclose the 2004 renovation constituted a violation of the RESDL. Having concluded the Gitomers did not fulfill their affirmative duty of disclosing the 2004 renovation, the Superior Court then turned to their liability for the violation. For the Gitomers to have liability under the RESDL, the Superior Court noted, the Gitomers must have been, at the very least, negligent in failing to disclose the renovation, and the Medlocks must have suffered actual damages as result. Since the Medlocks failed to establish that they had suffered actual damages as a result of this violation, the trial court’s decision was affirmed.
- Philadelphia “windows and doors” land use ordinance upheld.
In Rufo v. Board of License & Inspection Review, 192 A.3d 1113 (Pa. 2018), our Supreme Court upheld the constitutionality of a “windows and doors” land use ordinance adopted by the city of Philadelphia.
Vacant property owners within the city challenged these provisions of the city’s Property Maintenance Code, requiring owners of vacant buildings that are of “blighting influence” to secure all spaces designed as windows with working glazed windows and all entryways with working doors. Vacant property owners were cited for violating the windows and doors ordinance and brought a suit against the city, arguing that the ordinance violates the constitutional principles of substantive due process and was an unconstitutional exercise of the city’s police power.
At a hearing before the city’s Board of License and Inspection Review, the city’s policy and communications director testified that it had been determined, through numerous studies, that properties with boarded windows and doors without actual operable windows and doors contributes to blight within the neighborhood. The board rejected the property owners’ constitutional arguments and affirmed the city’s notice of violation and order. The property owners appealed to the trial court, which reversed, finding there to be no evidence in the record that putting functioning windows and doors on the subject property would make it safer and that the ordinance appeared to be more concerned with aesthetics rather than blight, safety and security. The Commonwealth Court affirmed.
On appeal, the Supreme Court reversed, finding that the lower courts had improperly placed the burden on the city to prove the constitutionality of the ordinance, rather than placing the burden on the property owners to establish that the ordinance bares no rational connection to a legitimate governmental purpose. The court noted that the challenger “must demonstrate that the legislative enactment at issue clearly, palpably, and plainly violates the Constitution” to meet its heavy burden of proof.
Furthermore, the city established that “the basis for its use of its police powers, its rationale for passing the ordinance, and the result it trusted the ordinance would achieve in the fight against blight.” As such, the property owners failed to sustain their burden of proving that the ordinance was unconstitutional.
Frank Kosir Jr. is an attorney at Pittsburgh-based law firm Meyer, Unkovic & Scott. He can be reached at FK@MUSLAW.com.