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CalAttorney2, Lawyer
Category: Real Estate Law
Satisfied Customers: 10244
Experience:  I am a civil litigation attorney with experience representing HOAs, homeowners, businesses and others in real estate matters.
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We purchased a house last year and on the seller's

Customer Question

We purchased a house last year and on the seller's disclosure document they didn't put anything about an "Air issue" in the house. We found out there is NO air flow into the master bedroom upstairs. When it was scoped they said the duct work goes down into the wall and looks to have never been operational.
Question: seller said she wasn't aware of that but we have had to use electric blankets to keep warm and talking to the two companies that gave us estimates they didn't believe any reasonable person would not know about the issue. What is the burden of proof for the seller's disclosure: what the owner actually knew (which is hard to prove) or what a reasonable person should have known?
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  CalAttorney2 replied 1 year ago.

Dear Customer,

The standard for fraud is that the defendant: (1) makes a material misrepresentation (2) that they knew, or should have known was untrue (3) with the intention that the plaintiff rely on that statement (4) causing the plaintiff harm.

In your case:

  1. The material misrepresentation (or omission): no ducting to the master bedroom
  2. The defendant knew, or should have known : they lived in the home - any reasonable person would have realized this defect ("you will need to use electric blankets")
  3. They intend that the plaintiff rely: they wanted you to buy the home, so they concealed this costly repair
  4. Causing plaintiff harm: you must now either live with this unhappy condition, or pay a fee for the resolution.

(Technically, Oregon uses 9 elements, but I use 4 to simplify and illustrate, the full 9 are below:

Defining Fraud in Oregon State

The 9 elements of Oregon fraud are: 1) A representation; 2) Its falsity; 3) Its materiality; 4) The speaker’s knowledge of the representation’s falsity or ignorance of its truth; 5) Intent that the representation be acted on in a manner reasonably contemplated; 6) The hearer’s ignorance of the falsity of the representation; 7) The hearer’s reliance on its truth; 8) The hearer’s right to rely on the representation; and 9) Damage caused by the representation. Musgrave v. Lucas, 193 Or 401, 410, 238 P2d 780 (1951); Webb v Clark, 274 Or 387, 391, 546 P2d 1078 (1976).

Short of filing a lawsuit, you can try to mediate the dispute with them - contact your local bar association and request referrals to mediators, a third party neutral can often help you reach a mutually agreeable resolution. Use the bar association's referrals to contact a mediator or two, the mediator will then contact the other party to set up a mediation session, and you can go from there - hopefully resulting in a formal or written settlement agreement, and save yourself the time and expense of litigation.