Appeal Denied - RE Agent / Seller Failure To Disclose & Fraud

**Bruce Breedlove** · 03-20-2010, 10:35 PM

In Ohio a real estate agent and his partner lost their appeal of a lower court's verdict in a civil suit brought against them by the buyer of a house they owned and sold. The buyer claimed the sellers committed fraud by failing to disclose known defects and had been awarded over $53,000 in damages. A home inspector and his recommendations figured prominently in the decision.

You can read the Ohio Court of Appeals' decision here: MELENIK v. McMANAMON

The sellers did not disclose previous foundation repairs, known existing foundation problems or known code violations. The sellers claimed they are not responsible because the buyer hired a home inspector (who specifically excluded zoning and building code violations from his agreement) and did not follow the inspector's recommendation that she consult with a structural engineer concerning a bowed wall. The primary structural problem - a different foundation wall that had shifted off its footing - was hidden behind a finished wall at the time of the inspection and was not visible - or disclosed - to the inspector.

The court's decision is an interesting read. For home inspectors there are probably many lessons to be learned from this case.

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**Michael Thomas** · 03-21-2010, 01:20 AM

I struggle constantly with the issue of report preparation time vs adequate documentation of limitations - this case is a good example of why.

Ted Menelly · 03-21-2010, 06:37 AM

Originally Posted by Bruce Breedlove

In Ohio a real estate agent and his partner lost their appeal of a lower court's verdict in a civil suit brought against them by the buyer of a house they owned and sold. The buyer claimed the sellers committed fraud by failing to disclose known defects and had been awarded over $53,000 in damages. A home inspector and his recommendations figured prominently in the decision.

You can read the Ohio Court of Appeals' decision here: MELENIK v. McMANAMON

The sellers did not disclose previous foundation repairs, known existing foundation problems or known code violations. The sellers claimed they are not responsible because the buyer hired a home inspector (who specifically excluded zoning and building code violations from his agreement) and did not follow the inspector's recommendation that she consult with a structural engineer concerning a bowed wall. The primary structural problem - a different foundation wall that had shifted off its footing - was hidden behind a finished wall at the time of the inspection and was not visible - or disclosed - to the inspector.

The court's decision is an interesting read. For home inspectors there are probably many lessons to be learned from this case.

I know nothing of anything that a seller has to disclose anything to a home inspector. The seller has absolutely no ties or obligations to a home inspector.

Even if the inspector saw or did not see a problem of an existing concern or a past concern does not take any obligation away from the seller to disclose anything to the buyer. The buyer is solely responsible for the disclosure to the buyer. Of course if the inspector missing something then he is liable but it still takes nothing away from the sellers obligation.

As far as the buyer not following a home inspectors recommendation....It takes nothing away from the obligation of the sellers to disclose.

Nothing new here as far as I can see.

**Billy Stephens** · 03-21-2010, 04:48 PM

Originally Posted by Bruce Breedlove

I

The sellers did not disclose previous foundation repairs, known existing foundation problems or known code violations. The sellers claimed they are not responsible because the buyer hired a home inspector (who specifically excluded zoning and building code violations from his agreement) and did not follow the inspector's recommendation that she consult with a structural engineer concerning a bowed wall. The primary structural problem - a different foundation wall that had shifted off its footing - was hidden behind a finished wall at the time of the inspection and was not visible - or disclosed - to the inspector.

The court's decision is an interesting read. For home inspectors there are probably many lessons to be learned from this case.

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Originally Posted by Ted Menelly

I know nothing of anything that a seller has to disclose anything to a home inspector. The seller has absolutely no ties or obligations to a home inspector.

Even if the inspector saw or did not see a problem of an existing concern or a past concern does not take any obligation away from the seller to disclose anything to the buyer. The buyer is solely responsible for the disclosure to the buyer. Of course if the inspector missing something then he is liable but it still takes nothing away from the sellers obligation.

As far as the buyer not following a home inspectors recommendation....It takes nothing away from the obligation of the sellers to disclose.

Nothing new here as far as I can see.

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Ted,

Remember this is a Record of a Judicial Precceding.

If the Inspector was found of either not reporting instead of not being able to see the defect because it was not visible he would be liable.

If the Inspector was found he had the information through disclosure and had not informed his client then he would be a Conspirator in the Fraud the Courts ruled upon.
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For me it appeared the Court took great pain to shred each point ( excuse why they Lied ) of the appeal as a future precedence.
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* the Buyer don't need no damages, She was Foreclosed on and this money will not be used to make Repairers.
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** Sorry Charlie You Committed Fraud and You Pay !

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