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Levine v. The Kramer Group

A-6271-00T1 (N.J. Super. App. Div. 2002) (Unpublished)

CONTRACTORS; DISCLOSURE; NUISANCES— A home builder is under no obligation to warn a customer about a particularly obnoxious neighbor because a contractor is under no duty to disclose a social condition.

Home buyers contracted for a new home to be constructed. That home was to be located next to another house and it was “undisputed for the purposes of this appeal that at some point after the parties’ entry into the [construction] agreement ..., [the owner of the adjacent home] embarked on a course of action that was alarming and harassing, as well as repellent.” The home buyers sued the developer for not advising them of the nature and character of this neighbor. They conceded, however, that prior to the making of the construction agreement the developer did not have any knowledge or notice that the neighbor would engage in such conduct. Apparently, after construction of the house began, the neighbor undertook a course of action aimed at halting the construction. In a letter to a municipal official, he stated, “I am all consumed with vengeful thoughts, coupled with thoughts of moving; including the notion of selling my home at a loss, to the largest group of the most loathsome bunch of excuses for human beings that I can feasibly round up.” Along the way, construction of the home was stopped and the contractor met with the neighbor about his “concerns about the construction” of the home. The contractor offered to make cosmetic and architectural changes. The neighbor initially rejected those gestures, describing the new home as an “abominable monolith” and stated that the “greater concerns [could not] be so simply covered up with cosmetic compromises.” The new home buyers alleged that the contractor never advised them of any of the correspondence between the developer and the neighbor and that the developer never informed them of the agreement that the developer eventually reached with the neighbor. Construction was completed, and the day that the new home buyers moved in, they received two letters from the neighbor expressing his hatred for them, even though the neighbor had never met them. The most pleasant language of one letter called the new home buyers “loathsome creatures” and “lowly scum.” The home buyers filed an harassment complaint, but the neighbor’s troubling behavior continued. Eventually, the neighbor was found guilty on four counts of harassment, was placed on probation, and ordered to have no further contact with his neighbors.

The Court characterized the suit by the homeowner against the contractor as sounding in tort. There was no contention that either party failed to comply with the terms of the construction contract. At most, the alleged cause of action was “an incident of the existence of the agreement.” While the homeowners agreed that an action against an ordinary home seller for “failure to warn” a buyer about obnoxious neighbors would fail, it argued that commercial developers and sellers of real estate should not be relieved of such an obligation. The Court found no basis for such a claim, “either in the common law or in the statutory law,” not even under the New Jersey Consumer Fraud Act. It analyzed cases concerning the duties of builders and developers and found that the duties imposed on them are related to the “construction and habitability of a residence,” and there was no authority “for imposing liability upon a builder/developer for factors outside his control, namely neighborhood personalities.” It also distinguished cases where it was held that “a wife who suspects or should suspect her husband of sexual abuse of their neighbors’ children” had such a duty to take reasonable steps to prevent or warn of the harm. Here, the developer was not on notice of the potentially harmful behavior of the neighbor in the same sense. The Court then distinguished New Jersey case law holding that a builder/developer is required to disclose known off-site conditions, instead holding that sellers of real estate “have no duty to investigate and disclose the transient social conditions in the community that arguably affect the value of the property.” According to the Court, this particular neighbor fell “under the category of a social condition which the [developer was] under no duty to disclose.”

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