You are here: Home / Blog / Your Home and the Law: Part II

Your Home and the Law: Part II

Buying a home is one of the most important economic decisions most people make. For most of us, our home is our biggest asset and our largest expense. Home ownership is part of the American dream, and it is a goal many of us strive to achieve. What happens when the house of your dreams turns out to be a money pit with mold problems or structural defects?

Buying a home is one of the most important economic decisions most people make.  For most of us, our home is our biggest asset and our largest expense.  Home ownership is part of the American dream, and it is a goal many of us strive to achieve.  What happens when the house of your dreams turns out to be a money pit with mold problems or structural defects? 

Wisconsin law provides some protection for the consumer who has been misled by the home seller.  The protection varies depending on who the seller is,  and recent decisions by the Wisconsin supreme court have threatened the protections available.  Wisconsin’s consumer statutes, sec. 100.18 provides twice your pecuniary damages plus your reasonable attorney’s fees if someone misrepresents the condition of a house.  For instance, the seller fills out a real estate condition report, and indicates that there are no problems with water in the basement.  The buyer purchases the home and finds out that the basement floods every time it rains.  The cost to fix the problem is $2,000.00.  If the buyer can prove the misrepresentation, they are entitled to $4,000.00 plus attorney’s fees. 

There are limits with the remedy, though. The statute excludes realtors from the attorney’s fee provision of the statute.  This exemption effectively guts the statute.  The risk of paying  attorney’s fees plus the damages is a significant incentive to make sure that all the information provided to the buyer is accurate. 

The Wisconsin supreme court has further limited a consumer’s remedies with respect to a home purchase.  Let’s take the leaky basement example and expand on it.  Let’s say that the seller knew about the leak problem, and took steps to cover it up.  Let’s say he painted the walls to hide the water marks, put in new carpet to get rid of the musty smell, and then flat out lied when asked by the potential buyer if there was ever water in the basement.  You would think that the consumer would have a claim for intentional misrepresentaion with the prospect of punitive damages.  Not so, according to the supreme court.  The consumer is limited to the remedies provided by the contract or by the consumer statute.  The court extended the economic loss doctrine to exclude claims for intentional misrepresentations. 

The lesson to be learned, be careful when buying your home.  You may want to consider a home inspection by an independent inspector.  If you have questions about a home purchase, contact kcarnell@lawtoncates.com or dgahnz@lawtoncates.com.

Martindale-Hubbell Peer Review Rated
Million Dollar Advocates Forum
Super Lawyers logo
National Board of Trial Advocacy Logo
Top 100 Trial Lawyers
Better Business Bureau