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Edwards v. Weiss

A-3172-00T5 (N.J. Super. App. Div. 2002) (Unpublished)

INSPECTIONS— Absent fraudulent conduct by a seller, a property owner who has a house inspected cannot rely on the fact that repairs were made by its seller to items discovered during the inspection, but must make its own reinspection.

Shortly after closing, a buyer discovered that the house’s septic system had totally failed. Prior to closing, the seller disclosed that there was a problem with the septic system. The seller then had the septic system repaired and disclosed that it had been repaired. The buyer obtained a house inspection, but expressly declined to have a separate septic system inspection because the buyer was satisfied with the certificate that had been issued by the county health department to the effect that the repairs had been completed. The house inspector noticed a pipe near the house that was discharging an odorous and foamy effluent. When the buyer asked the seller for an explanation, the seller speculated that the odor in the pipe came from the “leeching of a small amount of ground water from the septic field… .” The pipe was not part of the septic system. It was then capped and replaced with a dry well. After the system failed, the buyer had an expert examine the system and the expert opined that although there was no evidence of poor maintenance, the septic system was “destined to failure from its inception,” based primarily “on an analysis that the soil and the work done by the [septic repair company].” The buyer sued the seller for breach of the warranty of habitability. She attempted to rely on a case in which the seller had promised to bring the septic system up to code before the closing, but instead, “fraudulently obtained a certificate from the Board of Health stating that the septic system was [] operational… .” In that case, the court had found that because the sellers had fraudulently obtained the certificate, they would have to bear responsibility for the deception. Here, however, the Court held that “[a] reasonable inspection would have revealed the defects in the septic system.” Further, “[t]he conditions leading to the failure of the septic system were present when the repairs were done and when the closing occurred. These conditions were natural to the ground, and not a result of poor maintenance of the septic system.” Thus, unlike the case cited by the buyer, “an inspection prior to closing would have revealed the inadequacies.” All of the disclosure documents stated that there were no guarantees on the septic system and, unlike the case cited by the buyer, the certificate was not fraudulently obtained from the health department. Finally, the system was functioning properly at the time of closing. When the buyer voluntarily chose not to have the septic system inspected, she caused her own problem. Consequently, the buyer’s suit against her seller for violation of the implied warranty of habitability failed. The buyer also attempted to state a similar claim against the company that repaired the septic system. In response, the Appellate Division stated that, “the cases construing the implied warranty of habitability have not extended that warranty to contractors who do repairs to homes, but have only applied it to the owner-seller.” The buyer also claimed that her seller was “guilty of fraud by making misrepresentations concerning the extent of the problems with the septic system.” The Court rejected this allegation because there was nothing to show that the statements were not accurate when made. Further, the buyer argued that “because no independent investigation was conducted, [she] was justified in relying on the [seller’s] representations.” In response, the Court held that, “[a] party may not turn a blind eye to potential problems and then blame the seller when things go wrong.” Lastly, the buyer sought to make a claim against the repair company for defective repair, but the Court found that the repair company had, in fact, made the repair that it promised and that the repair company did not guarantee that the septic system was properly designed or would continue to function.

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