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Leaky Basement And Real Estate Misrepresentation Cases Are Wisconsin Homeowners' Nightmare

Posted on in Premises Liability

By: Attorney, Christopher Strohbehn

Basement-leakWhether you are a buyer or a seller of real estate it can be a nightmare to have a home with basement leak issues. It has the potential to not only put a large dent in your budget to fix the problems, it can lead to costly civil litigation if you fail to disclose it properly and misrepresent the condition of the property. If a homeowner has basement leak issues and fails to reveal it on a real estate disclosure form, it could subject the homeowner to costly civil litigation.

What are the penalties or potential costs for failing to properly disclose property defects in Wisconsin? There are certain Wisconsin statutes that deal with consumer misrepresentation and fraudulent conduct that are relevant to these real estate misrepresentation claims.

Section 100.18, Stats., deals with the damages associated with the publishing of untrue, deceptive or misleading advertisements with the intent induce the public in any manner to enter into a contract.  If a seller were to violate this statute by misrepresenting the condition of real estate in order to induce a buyer to purchase the property, the seller could be subject to paying the buyer his pecuniary losses, including costs of collection and attorney fees. §100.18 (11)(b)(2), Stats.

Not only can failing to disclose property defects subject a seller to damages under the consumer protection statutes, the civil theft statutes might also apply. The elements of theft-by-fraud contrary to section943.20(1)(d), Stats., are as follows:

(1) The defendant made a false representation to the owner of the property;

(2) The defendant knew that the representation was false;

(3) The defendant made the representation with the intent to deceive and defraud the property's owner;

(4) The defendant got title to the property as a result of the false representation;

(5) The owner of the property was deceived by the representation; and

(6) The owner of the property was thus defrauded.

State v. Kurzawa, 180 Wis. 3d 502, 525, n. 15, 509 N.W.2d 712, 722 n. 15 (1994). This statute can be made applicable within a civil cause of action and damages can be obtained pursuant to section 895.446, Stats. As the Wisconsin legislature outlined in section 895.446, Stats., damages are controlled as follows:

(3) If the plaintiff prevails in a civil action under sub. (1), he or she may recover all of the following:

(a) Actual damages, including the retail or replacement value of damaged, used, or lost property, whichever is greater, for a violation of s, 943.01, 943.011, 943.012, 943.017, 943.20, 943.201, 943.203, 943.21, 943.24, 943.26, 943.34, 943.395, 943.41, 943.50, 943.61, 943.74, or 943.76.

(b) All costs of investigation and litigation that were reasonably incurred, including the value of the time spent by any employee or agent of the victim.

(c) Exemplary damages of not more than 3 times the amount awarded under par. (a). No additional proof is required under this section for an award of exemplary damages under this paragraph.

What does this mean for sellers and buyers dealing with the issue of misrepresenting the sale of real estate? If you are a seller or seller's agent, you should be careful about how you disclose known property defects to potential buyers. If there is any question or doubt, consult an experienced Wisconsin real estate attorney. If you are a buyer, make sure that you obtain a property disclosure statement from the seller before making an offer to purchase any property and retain the necessary inspectors and experts to investigate the condition of the property in question.

If you find yourself in need of the advice of a Milwaukee or Wisconsin real estate attorney with a property defect issue or leaky basement issue, whether you need to defend or prosecute a claim of real estate misrepresentation, contact one of the attorneys at Gimbel, Reilly, Guerin and Brown LLP to discuss your case.

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