MISREPRESENTATION

Condition of Property/Non-Disclosure 

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Apperson, et al. v. Intracoastal Realty Corp., et al, 818 S.E.2d 202 (2018) 

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North Carolina Court of Appeals 

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Facts: Intracoastal, a real estate firm, listed a residential property for sale. Plaintiff Apperson and her husband purchased the property in November 2016. Defendants provided a disclosure statement stating that there were no issues with the drainage, grading, or soil stability of the property. The statement also indicated a new septic system was installed in 2014. Apperson had her own home inspection and was pro- vided with septic services reports and receipts concerning the septic system. After closing, Apperson discovered the septic system did not work and would need to be replaced, the new system would need to drain into a nearby creek and this drainage would require permission from the State. Apperson and her husband filed suit alleging the brokers and sellers negligently misrepresented the property and committed fraud. The trial court granted summary judgment to the Defendants. 

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Issue: Whether Plaintiffs sufficiently alleged facts to prove defendants negligently misrepresented or omitted material facts and but for those misrepresentations the plaintiffs would not have purchased the property. 

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Held: Affirmed. Plaintiffs failed to demonstrate they justifiably or actually relied upon misinformation from defendants to their detriment because on the disclosure statement it strongly encouraged buyers to obtain their own inspection and the plaintiffs had their own inspection completed prior to closing. Plaintiffs also failed to show that the defendant brokers knew or reasonably should have been about the defect in the septic system.