Experienced real estate attorneys oversee the legal process and documentation that is involved when buying or selling a piece of property. Their oversight is to ensure that the interests and rights of their client are preserved. One way in which a real estate attorney protects the rights of a buyer is to watch for specific disclaimers.

In a 1959 Court of Appeals opinion on Dannon Realty v. Harris, the court held that a buyer of real estate cannot sue a seller for fraud when the contract of sale includes a specific disclaimer about the matter in dispute. This means that if a contract of sale includes specific disclaimers about an item, issue, etc. the buyer no longer has the right to sue the seller for fraud.

Consider the following scenario: Robert bought a house from Samantha. The contract mentioned nothing about the roof, but during the transaction, Samantha assured Robert verbally that the roof was in excellent condition. After closing, Robert discovered that the roof was actually in very poor shape and needed to be replaced immediately. In this situation, Robert could sue Samantha, the seller, for fraud because the contract of sale was silent about the roof. This same scenario has a much different ending if one disclaimer is added to the contract of sale. If something along the lines of, “Seller makes no representation about the condition of the roof,” is added, Robert can no longer sue when he discovers after closing that the roof needs to be replaced even though the seller offered him verbal assurance that it was in very good condition.

As could be expected, this ruling led to a significant increase in the number of specific disclaimers included in contracts. In fact, contracts will often include long lists of specific disclaimers in order to take advantage of this precedent. The longer the list of disclaimers included in the contract of sale, the more claims for potential fraud are defeated before they are even filed. This provides a protection for buyers who could be subjected to unwarranted claims based on alleged oral statements.

Buyers seeking protection from fraud should work with an experienced real estate attorney who can easily navigate the sometimes-intimidating list of clauses that can be included in the contract of sale and explain the law as it pertains to the specific transaction at hand. A good real estate attorney will also advise their clients who are buying real estate to thoroughly read their purchase contracts and when there have been oral statements made that contradict or are completely absent of mention in the terms of the contract or plan, they should insist on a modification of the contract, so the claims are accurately represented in the document.

If you have questions regarding disclaimers to watch for in a contract of sale or if you need help navigating an upcoming real estate transaction, please get in touch with one of the experienced real estate attorneys at Aronow Law, P.C.