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Vol. 2007-07 | July, 2007

Real Property – Vendors and Agents’ Duty to Disclose

“.The principle of caveat emptor applies to sales of real estate relative to conditions open to observation. Where those conditions are discoverable and the purchaser has the opportunity for investigation and determination without concealment or hindrance by the vendor, the purchaser has no just cause for complaint even though there are misstatements and misrepresentations by the vendor not so reprehensible in nature as to constitute fraud.”

“.It is true that in Ohio the law requires a person to exercise proper vigilance in his dealings, so that where one is put on notice as to any doubt to the truth of the representation, the person is under a duty to reasonably investigate before reliance thereon. Feliciano v. Moore (1979), 64 Ohio App.2d 236 [18 O.O.3d 176]. However, vendors and their realty agents have a duty to disclose any material facts which are not visible and nondisclosure is willful misrepresentation. Gilbey v. Cooper (1973), 37 Ohio Misc. 119 [66 O.O.2d 366]. Appellees (purchasers) were entitled to rely upon the representations of the realtor because of the fiduciary nature of the relationship. A fiduciary is bound to make full disclosure of material facts known to him and not known to the other party, which affects the value of the property which is the subject of the transaction. Connelly v. Balkwill (N.D. Ohio 1959), 83 Ohio Law Abs. 513 [11 O.O.2d 289].” “.A person injured by fraud is entitled to such damages as will fairly compensate him for the wrong suffered; that is, the damages sustained by reason of the fraud or deceit, and which have naturally and proximately resulted therefrom. 25 Ohio Jurisprudence 2d 32, Fraud and Deceit, Section 201. The fundamental rule is that the owner must be compensated for the loss sustained. Groves v. Gray (1942), 74 Ohio App. 384 [29 O.O. 580]; 16 Ohio Jurisprudence 2d 91, Damages, Section 73.” Foust v. Valleybrook Realty Co. (1981), 4 Ohio App.3d 164, 165, 167.

Always yield to temptation, because it may not pass your way again.


AUTHOR / EDITOR: J. NORMAN STARK is an Attorney-at-Law, a Registered Architect, (AIA, NCARB) Registered Landscape Architect, Interior Designer, Planner and Senior Appraiser (ASA), admitted to practice law before the Bar of Ohio, the US District Courts, Ohio and Illinois (Central Dist.), the US Court of Appeals, and the United States Supreme Court. He is a Mediator, Arbitrator and Litigator with experience in Business, Construction Law, and Public Works, and with additional experience in Real Estate, Construction Attorney (Legal Project and Crisis Management), and as an Expert Witness (Forensic Architect). His office is in Cleveland, Ohio.