Construction Law

Residential Property Disclosure Statement

By Ryan McCabe

            McLaughlin v. Williams, 379 S.C. 451 (Ct. App. 2008).

            A purchaser could not bring a claim for fraud and negligent misrepresentation when the purchaser had notice of the defects from the inspection reports. The purchaser entered into an agreement to buy a house and scheduled a closing. The seller gave the buyer the Disclosure Statement. In addition, pursuant to the agreement between the parties, the buyer had an inspection done and obtained a Home Inspection Report. The report indicated moisture damage to the exterior of the house. Also, a termite and moisture inspection (CL-100) stated the house had wood-destroying fungi and wood moisture content of 28% or more below the first level.  The purchaser sued the seller, the seller?s agent, and the purchaser?s agent for fraud and negligent misrepresentation. All defendants filed a motion for summary judgment, alleging they were entitled to win as a matter of law. The trial court granted defendants? motions. The purchaser appealed.

            On appeal, the purchaser argued that the Disclosure Statement was a misrepresentation. The court stated, however, that ?there can be no reliance on a misstatement if the plaintiff knows the truth.? The Home Inspection Report and CL-100, while not covering all issues represented in the Disclosure Statement, clearly provided information that directly contradicted it. Such contradictory information gave the plaintiff knowledge of the moisture damage. Plaintiff, therefore, could not rely on the Disclosure Statement.

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Full post as published by The South Carolina Construction Law Blog on February 05, 2009 (boomark / email).