Can You Sue a Seller for Cover-Up or Fraud If You Buy A House “As Is”

October 5, 2015 in

In the case of Bowman v. Barker, et al., Bowman purchased a house and then discovered significant defects after he began living in it. He sued everyone involved in the transaction claiming misrepresentation on the condition of the house. The sellers moved for summary judgment and sought to establish that the purchase of this property in an “as is” state absolved him of any cover-up or fraud in the transaction. The judge apparently agreed and granted summary judgment in favor of the defendants.

The sellers had filed conclusory affidavits denying any awareness of any defects in the property at the time they sold to the buyer. The Florida 1st District Court of Appeals made note of the fact that the sellers were very experienced in real estate and had done many other house flipping projects like this one. They both admitted to having knowledge of the very poor initial condition of the house and that it was in such bad condition that they were able to buy it for little more than the value of the land. One or both of them also admitted to knowing about the need for substantial repairs including structural damage and a failing foundation.

This evidence alone was sufficient to raise a question of fact about the sellers’ knowledge as well as their credibility and the plausibility of their denying knowledge of the property’s substantial defects and what repairs were needed. The record also reflected that the sellers looked at the property before buying it, instructed the remodeling contractor about what work to do on the property, visited the property many times while the work was being done and agreed to repair all items that the buyer identified before the closing as needing repair. However, apparently, the seller had not found all of the problems that this house had. Relying on their remodeling contractor to take care of any problems with the house was deemed an insufficient defense by the sellers. Using a fixed-price contract with the remodeling contractor was also deemed suspicious and countered the argument that they were fixing everything that needed to be fixed. The remodeling contractor was deposed and apparently turned the tables on the sellers and indicated they were never told about many of the defects.

The fact that the house was sold “as is” was also not a defense to disclosing known defects under a prior 2003 opinion called Johnson v. Davis out of the Florida 2nd District Court of Appeals. The opinion also notes that the allegations of fraud against one of the sellers was particularly unsuitable for summary judgment because fraud is a subtle thing requiring a full explanation of the facts and circumstances of the alleged wrong.

Purchasers of homes should be aware of this decision. There is no reason why it would also not apply to the purchase of a car or other property that is being sold with such a caveat.

Most of us think that when buying something that is sold this way, it is buyer beware and there is no disclosure required of any known problems