Can a private homeowner be charged with Consumer Fraud ?

[burlingtony]

I agree to purchase a home and I believe both the realtor and the homeowner had knowledge that the home was misrepresented. I was wondering if the homeowner can be just as liable for fraud as the realtor ? Can a private person ..... be charge with something under the Consumer Fraud Act ??

[Eagle]

Yes, there is a section of the NJ Consumer Fraud Act that deals with Real Estate:

56:8-2. Fraud, etc., in connection with sale or advertisement of merchandise or real estate as unlawful practice
The act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise or real estate, or with the subsequent performance of such person as aforesaid, whether or not any person has in fact been misled, deceived or damaged thereby, is declared to be an unlawful practice; provided, however, that nothing herein contained shall apply to the owner or publisher of newspapers, magazines, publications or printed matter wherein such advertisement appears, or to the owner or operator of a radio or television station which disseminates such advertisement when the owner, publisher, or operator has no knowledge of the intent, design or purpose of the advertiser.


Realtors also have legal duties to disclose known conditions. Can you give us more specifics? Also, did you have a home inspection and did it uncover the condition in question?

[burlingtony]

I was in the process of scheduling a home inspector ..... and he was asking me details about the house. I told him it was a 4 bedroom home ...... 3 bedrooms being on one side of the house and the fourth bedroom off from the garage kitchen area. He said because the door to the bedroom opened to the garage .... it was not a legal bedroom ... it would not pass any firecode. The city verified this.

When I protested to the realtor .... he sais ... "What's the problem ..... it appraised for what you agreed to pay ... as a 3 beroom home" He sent me a copy of the owner's appraisal and now I find it's a 3 bedroom home.

My question was .... why show it as a 4 bedroom when it is only 3 ?

[Eagle]

Did you sign a contract to purchase the home and if so is the deal still pending?

[burlingtony]

I had signed a contract to purchase the home. I think under normal circumstances .... you only pay for services of a home inspector after you have signed a contract. The home inspector is there to uncover any defects which .... the homeowner has not disclosed or .... that an average person may not be aware of. Then it would be up to the homeowner to repair ( depending upon the cost ) or end the deal.

Obviously my concern is/was not about a defect but about a misrepresentation of the home.

The contract expired the end of Dec because I was obligated to get a mortgage by that time. I waited for their lawywer to respond to the request for rescision .... and then they changed lawyers on the 1st. His 1st response was I am in breach ..... 2nd response is they will sue for damages.

[Eagle]

If seller advertised it as a legal 4 bedroom and you proceeded to sign contract based on that representation and expend money time and effort based on that representation then seller and maybe the realtor is liable for fraud. You had a legal right to rescind or void the contract when you discoverd that what you bargained to purchase (a 4 legal 4 bedroom house) was really a legal 3 bedroom house. This is basic contract law.

Seller's assertion that you breached contract is nonsense. If they threaten you again with a lawsuit let them know you are contemplating suing for consumer fraud and common law fraud. That should make them go away.

[burlingtony]

My last offer for the sellers to rescind the contract and authorize the return of my money was rejected by them/their lawyer.

I have paid the lawyer's retainer fee and ..... I suppose he is going to file a suit against realtor and homeowner in court.

Seems unbelievable to most people I talk to ... in real estate and others but ..... this is the route it's going.

Thanks everyone for your replies and interest .... any help or tips will still be appreciated and ... l'll see how it all ends.