Home Seller Survives Lawsuit Alleging Failure To Disclose Municipal Code Violation Citations Duped Buyer Into Purchasing Dilapidated House

The Minnesota Court of Appeals recently affirmed a lower court ruling rejecting a homebuyer's attempt to sue the seller for fraud where the seller failed to disclose that the house had been tagged with multiple citations for municipal code violations.

Given the specific facts in this case (as set forth in the court ruling), the court concluded that the buyer either knew or should have known that the place was a dump and falling apart, and consequently, that she should have known better.(1)

For the ruling, see Saclolo v. Shaleen, No. A10-2165 (Minn. App. July 18, 2011).

(1) After an analysis of the facts of this case, the Minnesota appeals court ruled as follows (bold text is my emphasis):

• The district court concluded that, as a matter of law, appellant should have discovered the facts constituting respondent's alleged fraud at the time of purchase. We agree.
  
  Appellant states that she did not learn of the inspection notices until she received a letter from the City of Mound in April 2007. But she provides no explanation for why she should not have learned about the inspection notices at the time of purchase.
  
  The undisputed facts show that at that time, appellant knew that the property was in a state of disrepair, and she was aware that respondent lacked permits for work on the property.
  
  Based on this knowledge, and particularly in light of the extent of the observable disrepair, appellant was on notice that government entities could have cited respondent for code violations or the lack of permits and that, were it a material concern, it would be prudent to investigate whether any such citations had been issued. Under the circumstances, the district court did not err by concluding that appellant's claims were brought outside the limitations period and by entering summary judgment in favor of respondent.