General

No Fraud in Sale of Property When Buyer Saw Numerous Problems Before the Sale

Burgess purchased a house from the Frenches. The house was in need of major repair; only one room was completed. Wiring and insulation were exposed throughout the house. The Seller Property Disclosure Form stated that the Frenches had not had any problems with the house. Burgess’s agent had seen a puddle of water in the house and encouraged him to get a professional inspection. Burgess refused because he conducted inspections for a living.

The sales contract contained a “disclaimer of reliance” clause that he had inspected the property to his satisfaction and was not relying on the Frenches. The contract also stated that Burgess purchased the house “as is.” A week after the sale, Burgess had problems with the roof and electrical system. He called Mrs. French, and she admitted that Mr. French had recently made repairs to the roof. Burgess sued for fraud and constructive fraud.

In affirming judgment for the sellers, the court held it was unreasonable for Burgess to claim reliance. Aside from the disclaimer and “as is” clauses, he had an obligation to make further inquiry when he saw the exposed wiring and was told about the puddle of water.