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Lapinski v. Bamford

A-3930-07T3 (N.J. Super. App. Div. 2009) (Unpublished)

CONTRACTS; OFF-SITE CONDITIONS — A private seller of a previously constructed home is not subject to the disclosure provisions of the New Residential Construction Off-Site Conditions Act, but may be held liable if it deliberately withholds information about off-site conditions, known only to the seller, not publically known, and which would have a direct impact on its buyer’s willingness to close title.

A husband and wife entered into a contract to purchase a three-story townhouse. The property was being sold in “AS IS” condition subject to a satisfactory home inspection. Prior to closing, the sellers received notice from their neighbors, who shared a common wall, that they were doing some work to the common wall. They agreed to grant a license to the neighbors to enter onto their property to safeguard it against damage. The sellers did not tell their prospective buyers that the work was being done. Shortly after the closing, the new owners returned home to find hammering and dust, and found bricks falling into their house. A few days later, they noticed that the whole side of their house had been removed, right down to the insulation, and that their aluminum siding had been pulled off. Construction on the neighbor’s house temporarily stopped when other neighbors complained. Following a three week period of prolonged rainfall, the ceiling of the new owner’s house collapsed. The new owner’s house was further damaged on numerous occasions due to the construction work being performed. The neighbor’s contractor repaired the damage. The increased dust, mildew, and mold caused by the construction aggravated the owner’s allergies and dramatically changed the views from their residence. The new owners sued, claiming their sellers had acted fraudulently and negligently by not informing them of the proposed construction. The sellers moved for summary judgment claiming that they had no duty to disclose current or future off-site conditions.

The lower court granted summary judgment in favor of the sellers and dismissed the complaint. It reviewed the New Residential Construction Off-Site Conditions Act, under which sellers of newly constructed homes are obligated to provide buyers with a statutorily- prescribed notice that directs the buyers to information maintained by municipalities regarding off-site conditions. It agreed with the sellers that, under the Act, they had no duty to disclose information relating to the off-site conditions to the new owners. According to the lower court, the issue of whether the new owners received notice of the neighbor’s construction was irrelevant. The new owners appealed.

The Appellate Division reversed the lower court’s decision, holding that the Disclosure Act did not apply because the buyers did not purchase a newly constructed home and the circumstances did not involve an off-site condition. It ruled that when the sellers closed on the home, they were clearly aware that the license they had granted would directly impact the new owner’s use and enjoyment of the premises. Thus, it concluded that the lower court erred in finding the sellers had no duty to disclose, to their buyers, the notice they received from its neighbors. Accordingly, it ruled that the buyers were entitled to summary judgment as a matter of law. Finally, the Court held that a determination as to whether the sellers deliberately withheld information about the license because they feared the buyers would object to closing in the face of an impending renovation of adjacent property was a question for a jury to answer. Thus, the case was remanded.

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