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Gueye v. Amato

A-0773-07T2 (N.J. Super. App. Div. 2008) (Unpublished)

CONTRACTS; REPRESENTATIONS — A buyer, knowing before closing that a representation has been breached may not choose to take title and then bring an action against its seller following closing.

A buyer bought a house and later discovered water seepage through the basement walls. In the purchase contract, the seller represented that there were no current leaks in the roof, walls or basement. The sellers’ representations were not to survive the closing of title and the condition of the premises was not guaranteed by the sellers following the delivery of the deed. The contract also gave the buyer the right to inspect the premises, allowing it to void the contract if any discovered physical defects were not corrected by the sellers. The sellers told the buyer that water stains discovered on a basement wall during an inspection were the result of clogged gutters that had since been cleaned. The sellers also told the buyer that the ground surrounding the house had been regraded to prevent any additional leakage. The buyer did not request an additional inspection or request any additional action. Instead, she proceeded to close on the sale.

After the buyer discovered the water seepage, she obtained an estimate from a waterproofing service of about $7,000.00. She subsequently sued the sellers. A salesman for the waterproofing service testified at trial that he did not think that the leakage was the result of the grading around the house. The lower court dismissed the action, finding that the sellers had no additional obligation to the buyer since she had the right to have the property re-inspected prior to closing. The salesman’s testimony was found to be unpersuasive since his opinion was that of a sales representative and not that of an engineer. On appeal, the Appellate Division found that the appropriate remedy for the buyer, upon the discovery of the water stains on the basement wall, was to demand that the sellers waterproof the basement or otherwise remedy the cause of the stains, and to terminate the agreement if her demands were not met. The buyer could not choose to take title and then bring an action against the sellers following closing. Additionally, the Court held that the buyer could not establish fraud unless she proved that the sellers made a material misrepresentation of fact, which was found to be lacking. As a result, the lower court’s dismissal of the buyer’s action against the sellers was affirmed.

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