(908)402-4770A recent Appellate Division case (Rogers v. Conti, 2023 N.J. Super. Unpub. LEXIS 679 (App. Div. May 5, 2023)) highlights issues that can arise in a residential real estate transaction regarding the obligation of residential sellers to make disclosures in New Jersey.
Robert and Joyce Rogers entered into a contract with Nora Conti for the purchase of Mrs. Conti’s home. Mrs. Conti, an elderly person, had moved out of her home about a year prior to the contract’s execution for health reasons. The home sale was made on an “as is” basis, indicating the buyer was taking the property in its present state.
It also turns out that a year before the sale, there was a leak in a hallway bathroom. Mrs. Conti’s son, Christopher, was his mother’s attorney-in-fact (and a named defendant). He discovered the leak within 24 hours and filed a homeowner’s claim on behalf of his mother. The insurance company arranged for a contractor to repair the damaged walls/ceiling of the bathroom. The repairs included treatment of the affected areas with an anti-microbial agent.
Christopher did not disclose the prior leak on the standard seller’s disclosure statement prepared for the closing.
As is standard practice, Rogers ordered a home inspection of the property. The inspection yielded no discernible issues, and the sale of Mrs. Conti’s home to the Rogers proceeded uneventfully.
That is, until three days after the closing, the Rogers discovered mold behind some interior walls. The discovery prompted Rogers to demand the rescission of the sale (that is, the cancellation of the contract of sale and the return of the parties to the positions they would have had if the contract had not been made).
In response, Christopher agreed. He returned the sales proceeds to his attorney’s escrow account and attempted to halt the processing of a new deed.
Surprisingly, Rogers subsequently reversed their position and said they wanted to proceed with the sale.
The Rogers then made extensive renovations to the supposedly mold-infested areas of the home. In the process, they removed all evidence of the presence of mold. Furthermore, Rogers didn’t allow Christopher to inspect the mold-infested areas before or during the remediation work.
After the evidence of mold was removed, Rogers sued the Contis in Superior Court. Their suit alleged breach of contract, civil conspiracy, intentional common law and consumer fraud, and breach of the implied covenant of good faith and fair dealing. The Rogers contended that the non-disclosure of the prior leakage event deprived them of making informed decisions during the property transaction. They further asserted the Contis bore an independent, affirmative duty to divulge the occurrence of the leak.
After completion of discovery, the Contis moved for summary judgment. They asked the trial judge to dismiss the claim and bar Rogers’ expert report and testimony.
The trial court agreed, ruling the Contis were not required to make a disclosure of the prior leak.
Additionally, the trial court determined the Rogers’ expert’s report was a net opinion
The Rogers appealed the trial judge’s decision to the Appellate Division. In a per curium decision, the Appellate Division noted:
Generally, when the term “as is” is used in connection with the sale of realty, it acknowledges that the purchaser is “acquiring real property in its present state or condition.” K. Woodmere Assocs., L.P. v. Menk Corp., 316 N.J. Super. 306, 316 (App. Div. 1998) (citations omitted). The term implies real property is taken with whatever faults it may possess, and that the grantor is released of any obligation to reimburse the purchaser for losses or damages resulting from the condition of the property conveyed. Id. at 317.
Furthermore, the Court found that Rogers could not “establish defendants had a duty to disclose an unknown mold condition, much less breach of that duty. Additionally, in the absence of an expert report, plaintiffs cannot prove the alleged mold condition was caused by the water leak remediated a year prior to the closing, and the trial court correctly granted summary judgment to the defendants. The causal nexus cannot be established.”
Takeaways from This Decision
The Appellate Division pointed out that the form disclosure statement asked questions about the present condition of a property, not any prior occurrences on the property. The Contis had fully repaired the damage from the previous leak, including the anti-microbial treatment. They were not required to disclose that leak.
Consequently, Contis answered the disclosure statement accurately.
Additionally, the Court found the Rogers could not establish any duty on the Contis to disclose an unknown, latent condition, particularly in light of Rogers’ own professional inspection and that the property was being sold in an “as is” condition.
EXPERIENCED UNION COUNTY, NEW JERSEY RESIDENTIAL REAL ESTATE LAWYERS
There are several steps that must be taken for the sale of residential property to be completed. The Union County, New Jersey residential real estate attorneys at Schiller, Pittenger & Galvin, P.C., have handled hundreds of residential real estate transactions across New Jersey. We know what is required of buyers and sellers and prepare our clients accordingly. If any problems arise (and they sometimes do), we address them immediately and make every effort to resolve them.
If you need the help of experienced New Jersey residential real estate lawyers, contact us in our Scotch Plains office at 908 490 0444 or email us here.