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Hibbs v. Overstreet

A-3354-00T3 (N.J. Super. App. Div. 2002) (Unpublished)

CONTRACTS; “AS-IS”— Certifications made by a seller in a disclosure statement override “As-Is” contract provisions.

A couple purchased a house pursuant to an agreement that provided that the house was being sold “As-Is.” The seller certified in a disclosure statement that “no additions, structural modifications, or other modifications, or repairs were made without necessary permits.” Approximately six months after settlement, the buyers noticed brown water running off the roof. After inspection, they discovered that the roof, plywood, rafters, and insulation were wet due to lack of venting. They later discovered that the roofing contractor had not obtained permits. When the seller sued her buyers for not returning $1,000 being held in escrow for a floor stain, the buyers countersued for the roof repairs. The lower court awarded the buyers $800 for the removal of the floor stain and $10,000 for the counterclaim (the jurisdictional maximum) for breach of the implied warranty of fitness for habitability, on the basis that the roof repair was defective and done without permits. The seller appealed. The Appellate Division concurred with the lower court’s finding that the seller had breached the implied warranty of habitability and even though she “certified that no work was done on the house without necessary permits or licensed contractors, [...] the evidence was clear that [the seller] completed the renovations without the necessary permits.” The wrongful certification overrode the “as-is” provisions of the contract.

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