July 15, 2019

A Cup of Joe | The Case of the Hidden House Leaks

“To save one from a mistake is a gift of paradise.” ― Frank Herbert, Dune

This week’s Cup of Joe takes us to Staten Island, NY, where Jersey Shore’s Situation, Vinny, and Angelina come from. The topic of discussion, however, is not Jersey Shore, but rather yet-another purchase of a home gone bad.  So grab your favorite beverage and let’s find out what happened to the Pesce family when they discovered they bought a money pit.

Enter: Adriana and Paolo Pesce (the Buyers); Richard and Lydia Leimsider (the Sellers).

After a seemingly endless searching for a home, Adriana and Paolo found their dream house on Staten Island. The owners of that house were Lydia and Richard. Paolo had his lawyer contact Richard’s lawyer and a deal was underway. Paolo had a home inspector check out the house and everything appeared to be okay. So, a closing day was set at the lawyer’s office and everyone showed up on time and happy. There was a mountain of papers that were waiting to be signed and a deck of checks waiting to be distributed. The closing was easy and Adriana and Paolo left the lawyer’s office as homeowners. Their first one. It was August.

Not long after the closing, a summer rainstorm drenched the city. Gallons of water infiltrated Adriana and Paolo’s new home causing severe damage to the interior of the property. Paolo contacted Richard directly and told him about the water infiltration. Richard said there was nothing he could do. Paolo sued.

Direct Examination of Paolo

Q: What was the condition of the house when you inspected it?

A: To me, it looked fine. Everything had just been painted and it seemed okay.

Q: Did you ask Richard about water leaks?

A: Not specifically. I did ask whether there were any structural problems that I should be concerned with, like the roof and the plumbing.

Q: What did Richard say in response?

A: He said, “No problems. We’re just ready for a bigger place.”

Cross Examination 

Q: You hired a Home Inspector before you purchased the home?

A: I did.

Q: And they inspected the house before you purchased the home?

A: They did.

Q: And they provided you with a report?

A: Yes. It is in evidence.

Q: And there is no indication of any water infiltration in the home you purchased, right?

A: That is right.

Q: Sir, I am handing you Defendants’ Exhibit N, which is an acknowledgment of your receipt of a $500 credit on the home’s purchase price in lieu of a Property Condition Disclosure Statement, in accordance with Real Property Law § 465. What was your understanding of that document?

A: It meant that I got a $500 credit in exchange for Richard not having to disclose any problems with the property.

Q: Nothing further.

Direct Examination of Adriana

Q: You were present when your contractor opened the walls where the leaking was coming from.

A: I was.

Q: What did you see?

A: The wood behind the walls was saturated and rotted. The entire wall of cinder blocks was covered with black mold and green slime.

Q: Did the contractor write up this report, which is Plaintiffs’ Exhibit 17 in Evidence?

A: May I see it?

Q: Your Honor, may we have Plaintiffs’ 17 handed to the witness?

COURT: Certainly.

A: Yes, that is the report.

Q: And the report indicates that the wall had recently been covered by a recent repair?


COURT: Counsel it is in evidence. Your objection is OVERRULED.

A: Yes, the engineer wrote in his report, just like he testified yesterday, that the rotted wood and mold was recently covered up.

Closing by Defendant: Adriana and Paolo’s acceptance of a $500 credit in lieu of a Property Condition Disclosure Statement, precludes them from pursuing a claim for active concealment of a defect. The case should be dismissed.

The Trial Court’s Ruling: Adriana and Paolo’s case was DISMISSED. The court agreed with Richard. The $500 credit was a Get-Out-of-Jail-Free Card. Right? Wrong! Paolo appeals.

The Appeal

The Trial Court was REVERSED.  Here is why: Real Property Law § 467 provides that nothing contained in the Property Condition Disclosure Act can be read to limit any existing legal cause of action or remedy at law. This was a case of fraud.

Actively concealing a defect is against the law – Richard and Lydia will not get away with hiding the rotten walls. Paolo and Adriana will recover the money they paid to have the defects repaired including the damage caused by the water infiltration.  And…they get to keep the $500 credit!

See you next week.

Here is the case: http://www.courts.state.ny.us/reporter/3dseries/2018/2018_28063.htm

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