Diemert v. Binstock, 2019-Ohio-3368
Buying or selling a home “as is” does not necessarily mean the seller, or the buyer, don’t still have responsibilities to each other. In Diemert v. Binstock 2019-Ohio-3368, the Court of Appeals for the Eighth District in Cuyahoga County affirmed the lower courts decision dismissing a fraudulent misrepresentation claim stemming from the purchase of a home “as is.” The reason for the dismissal, though, was not because the purchase of the home was in an “as is” condition.
Unlike other goods purchased “as is,” Ohio Revised Code 5302.30 requires the seller still must inform the buyer of, “material defects in the property within the actual knowledge of the (seller).”. The key words to keep in mind here is that the seller is only required to inform the buyer, through a disclosure form, of material defects with the property that are within the actual knowledge of the seller. The ‘as is’ clause is no longer applicable if the property disclosure form contains misrepresentations (See Diemert v. Binstock).
While this makes sense on its face, any fraudulent misrepresentation case involving real estate hinges on whether the seller actually knew of the material defect with the property and voluntarily chose not to disclose that defect. The decision in Diemert further states that “… the owner is not required to speculate, and is charged only to reveal the existence of conditions within his or her actual knowledge.”
In Diemert, the trial court dismissed the Plaintiff’s claim for fraudulent misrepresentation because the Plaintiff failed to present evidence that the Defendant/Seller of the property knew of a defect with water and sewer pipes in the basement of the purchased home, which flooded the basement and caused $22,000 in damage.
“Our review of the record reflects that Diemert did not present any evidence that Binstock, knew, or should have known, about the illegal sewer tie-in or water problems in the basement. Diemert presented no evidence that Binstock actively concealed a known defect… or evidence that Binstock made positive, fraudulent representations as to the condition of the property… Binstock stated in the property disclosure statement that she had no knowledge of any water problems in the basement; Diemert was unable to rebut that claim.”
Moreover, the court in Diemert also suggested that the “as is” provision kicks back in after any disclosures are made, and the onus is then on the buyer to seek out any material issues with the property being purchased.
“When a buyer has had the opportunity to inspect the property, the buyer “is charged with knowledge of the conditions that a reasonable inspection would have disclosed… The house was sold in an ‘as is’ condition. Diemert, as the buyer, had the opportunity to have a professional inspect the property, but chose not to do so, even though a friend, Otino, noticed the trench marks in the basement that indicated a prior water problem.”
When selling your home, it is imperative that you disclose any defects to prevent these issues from arising. When purchasing a home, it is equally imperative that you have the home inspected by a professional. In each case, you are protecting yourself in the event a dispute about your home arises. If such a dispute does occur, the attorneys at Weisensell, Mastrantonio & Orlando, LLP. are here to help navigate these sticky, and sometimes wet, situations. If you have questions about real estate law, please contact one of our experienced attorneys.