Washington Case Law Update: Material Facts Available in the Public Domain Lead to Dismissal of Real Estate Buyer’s Lawsuit

Washington Case Law Update: Material Facts Available in the Public Domain Lead to Dismissal of Real Estate Buyer’s Lawsuit

From the desk of Smith Freed Eberhard: A basic component of real estate transactions is the seller’s obligation to disclose existing, known material facts of the property. A failure to properly disclose all such material facts can lead to lawsuits against any party required to make such disclosures, such as sellers and brokers, for negligent misrepresentation, intentional misrepresentation, and occasionally violations of Washington’s Consumer Protection Act. What if a buyer makes such a claim when the information allegedly concealed was in the public domain? Will the buyer still be able to assert claims for misrepresentation or violation of the CPA? Read on to find out.

Case Pointer: In this dispute between a buyer of commercial property and the seller/broker, the property at issue was under threat of public condemnation by a local government agency. The facts were disputed as to whether the seller and/or broker had actual knowledge that the condemnation was scheduled to occur, but despite the uncertainty, the property was approved to be condemned a few months after the sale closed. To avoid condemnation, the buyer sold the property to the local agency for a small profit. The buyer filed a lawsuit against the seller and their broker alleging misrepresentation. The Washington Court of Appeals determined that the information regarding the potential condemnation was readily available to the buyer at the time of the sale. For that reason, the buyer was unable to maintain his lawsuit and the case was dismissed.

AVH & BJ Holdings 2, LLC, v. LaClare Investments, LLC, et. al, Wash. Ct. App. No. 51001-4-II (unpublished).

AVH and BJ Holdings (collectively, the “buyers”) bought property sitting between two railroad tracks in Tacoma (the “Property”) from LaClare Investments, LLC (the “seller”). The sale was brokered by Johnson...

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