Property Condition Disclosure Statement ("PCDA")

This week we wanted to draw your attention to a case decided in Albany County that, in reversing a lower court’s decision, rejected a Plaintiff/Purchaser’s claims for relief based on theories of breach of contract, fraudulent inducement, unjust enrichment and quantum meruit which included an analysis of the Property Condition Disclosure Statement delivered by Seller in accordance with the Real Property Condition Disclosure Act (“RPDA” Article 14 – RPP 462). The relevant facts, as well as a link to the case, are set forth below.

One month after closing, the purchasers noticed a “musty smell” in the basement of the home and rainwater pooling in the basement. They sued the sellers to recover $13,000, the cost to repair the damage. Under the contract the property was sold “as is” without any warranty, the purchasers’ home inspection did not report any sign of water penetration, and the sellers represented in a Property Condition Disclosure Statement (“PCDA”)that they had no knowledge of any rot or water damage. Notwithstanding, the purchasers, claimed that the sellers know or should have known of the water problem in the basement of the house and the Albany City Court, finding that the purchasers had established a prima facie case, denied the sellers’ motion for summary judgment dismissing the complaint. The Albany County Court reversed the lower court’s ruling and granted the sellers’ motion for summary judgment.
The Plaintiff asserted causes of action alleging breach of contract, fraudulent inducement, unjust enrichment and quantum meruit. The County Court dismissed the breach of contract cause of action because the contract disclaimed any warranty or representation as to the property’s condition and, a PCDA being completed based on actual knowledge, there was “no proof that the sellers knowingly misrepresented a material fact” when completing the PCDA. As to fraudulent concealment, there was no proof that the sellers had actively concealed the condition. As to fraudulent concealment, the sellers had no actual knowledge of the water-related issues and the purchasers had the property inspection. Lastly, as to quantum meruit, “the sellers performed no services for the purchasers…Moreover, where, as here, there exists a binding sales contract which specifically provides that the property is sold ‘as is’ there can be no recovery in quasi-contract for quantum meruit [citation omitted].” Amiri v. Gurusamy, 2021 NY Slip Op 21368, decided December 21, 2021, is posted athttps://www.nycourts.gov/reporter/3dseries/2021/2021_21368.htm