Litigators know that proving fraud against a seller in the residential real estate context can be challenging and being awarded damages for fraud even more so. The recent decision in Floyd v. Wigfield, (Oct. 2014, Lehigh Co., No. 2012-C-4131), handed down this past October, provides a useful analysis of the facts and types of claims that should be considered. The case also serves as a reminder that failure-to-disclose cases continue to be litigated in our state. This is so despite the requirement in the 1996 Real Estate Seller Disclosure Law (68 Pa.C.S.A. Section 7301) requiring material defects to be disclosed in writing before an agreement of sale for residential real estate is signed as well as the 1968 Unfair Trade Practices and Consumer Protection Law (73 P.S. Section 201-1 et seq.), made applicable to residential real estate transactions by the Superior Court in 1987.
The facts are straightforward enough: Shannon Floyd, Norman D’Avanzo and Ruth D’Avanzo (the buyers), purchased property in Emmaus, Pa., from Edward and Carol Wigfield (the sellers) on Oct. 9, 2010. During their ownership, the sellers made various improvements to the property, including the conversion of a barn on the site into multiple apartment units and alterations to the wastewater system. The sellers were the only owners in the chain of title prior to the sale to the buyers. They listed the property and prepared various documents, including a required seller’s property disclosure statement that did not disclose any information on any code violations. The property was marketed as having two income-producing rental units, in addition to the main residence being ready for use.
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