A recent decision by a Chester County judge limits the scope of a seller’s duties under Pennsylvania’s Real Estate Seller Disclosure Law (RESDL).

The plaintiffs in Pillard v. Popolizio are purchasers of a property who alleged that the seller falsely claimed in disclosures that he was unaware of any past or present problems with a retaining wall that was at-or-near the end of its life cycle.

In a nonjury trial, the next-door neighbor testified that he had informed the seller of a potential structural defect in the retaining wall and that he believed the wall had been installed without a permit. But the seller denied that claim and showed that the wall was properly permitted and installed in accordance with municipal regulations in 1992.

No Expert Witness

The court concluded that the plaintiffs had failed to prove their claims under RESDL or the Unfair Trade Practices and Consumer Protection Law (UTPCPL). The neighbor, the court noted, was not an expert witness and therefore could not offer an opinion on the wall's structural soundness.

Under RESDL, a seller must disclose known material defects, which are anything that would have a significant adverse impact on the value of the property or involves an unreasonable risk to people on the property. The fact that a structural element or system is at or beyond its end of normal useful life is not by itself a material defect, the court determined.

The defense was strengthened, the court found, by the fact that any defects were not hidden, and the plaintiffs and their inspector had access and clear view of the retaining wall and its condition.

The Court also determined there was not a violation of the UTPCPL as there was no clear evidence to support a verdict that Defendant engaged in any unfair or deceptive acts or practices or engaged in fraudulent or deceptive conduct that would create the likelihood of confusion or misunderstanding.

Takeaways

This case offers takeaways for both sides in any transaction. For sellers, it is important to ensure that all known material defects are properly disclosed. For buyers, it is important to complete due diligence and thorough inspections, especially regarding clear and obvious degradation of structures.

For more information on seller disclosure requirements or real estate matters in general, contact Samuel Finkel at sfinkel@foxrothschild.com or 215.918.3553 or any member of Fox Rothschild’s Real Estate Department.