If we purchased a home that was misrepresented to us, can we sue for damages?

We specifically were looking for a farm property with no restrictions, outside the city limits. Our agent inquired with the listing agent, and was lied to, told it was not in the city limits, had no restrictions, and we didn’t find out our property is inside the city limits, zoned R1 on 9.93 acres with all of the restrictions of all the city codes and ordinances that go along with the R1 zoning, until about a month and a half after closing and moving in. The listing agent showed it as not in the city limits on the MLS listing, has admitted he didn’t know it was in the city limits. We’ve discovered other property issues during our research.

Asked on February 1, 2016 under Real Estate Law, Arkansas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

There is case you could bring, but it has challenges.
1) The realtor is likelynot liable; realtors do not have to independently research properties, but may rely on what the seller tells them, so unless you can prove the realtor knew the truth and lied, she would not be liable.
2) The seller couldbe liae for committing fraud (lying about material ir important facts) if he knew or should have known about the true status but provided untrue information.
However, in a fraud case, you have to show that it was reasonable to rely on the misrepresentation. The true zoning, etc. is something you could have verified yourselves or which should have been determined during the preclosing title check. Therefore, itis possible that a court could conclude that your reliance on the misrepresentation was not reasonable.
If you can prove your fraud case (a lie to you; your reliance on the kie was reasonable), you could get monetary compensation or even void (undo) the sale.
 


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