Daily Development for Wednesday, April 27, 2005 by: Patrick
A. Randolph, Jr.
Elmer F. Pierson Professor of Law UMKC School of Law Of Counsel: Blackwell Sanders Peper Martin Kansas City, Missouri firstname.lastname@example.org
I've had this kind of case before, which I settled for an amount that disappointed my buyer client - but now appears to have been a wise decision. So I thought it would make an interesting DD.
BROKERS; MISREPRESENTATION; SIZE: Even where brokers advertise property based upon its comparative cost per square foot as compared to other homes in neighborhood, buyer has no claim for damages when property proves 650 square feet less if buyer cannot show that the fair market value of the property was in fact lower than the price buyer paid.
Matheus v. Sesser, 2005 Westlaw No. 914473, No. 2-03-222-CV (Tex.App. Dist.2 04/21/2005)
The advertisement listed the price per square foot of the house and emphasized that this was substantially below the per square foot price of other houses in the neighborhood. The evidence showed that the buyer relied upon the "per square foot" analysis in making decisions about offering and counteroffering on the house. And it was clear that the brokers had been negligent in computing the square footage. Although their statement as to square footage included the statement that this was "per tax" - a common note that the broker is relying upon tax assessment roles - in fact the brokers had erroneously added together figures that in fact should not have been added, as they already were comprehensive.
Notwithstanding this evidence, the court found that there could be no recovery because there was no evidence that the buyer had suffered damages. The bank's appraisal of the property - the only evidence offered of the fair market value of the property - indicated that the property was worth more than the buyer paid for it, even though not worth as much as the buyer probably anticipated.
The buyer argued strongly that he was entitled to a "benefit of the bargain" measure that would award him the difference between the actual size of the house and the represented size, based on the per square foot value that was urged. This would have resulted in a $50,000 award. The court responded that the standard methods of computing damages did not permit looking beyond the fair value evidence. One precedent case otherwise was dismissed as dicta.
Comment: It's quite possible that the buyer would have had a better chance seeking rescission. Clearly the house was not "as advertised," and the buyer was entitled to rely on the specific representation. But if the buyer accepted the house, then the buyer was held not to complain that the bargain was less rich than he anticipated.
Readers are encouraged to respond to or criticize this posting.
Items reported on DIRT and in the ABA publications related to it are for general information purposes only and should not be relied upon in the course of representation or in the forming of decisions in legal matters. The same is true of all commentary provided by contributors to the DIRT list. Accuracy of data provided and opinions expressed by the DIRT editor the sole responsibility of the DIRT editor and are in no sense the publication of the ABA.
Parties posting messages to DIRT are posting to a source that is readily accessible by members of the general public, and should take that fact into account in evaluating confidentiality issues.
DIRT is an internet discussion group for serious real estate professionals. Message volume varies, but commonly runs 5 - 15 messages per work day.
Daily Developments are posted every work day. To subscribe, send the message
subscribe Dirt [your name]
To cancel your subscription, send the message signoff DIRT to the address:
for information on other commands, send the message Help to the listserv address.
DIRT has an alternate, more extensive coverage that includes not only commercial and general real estate matters but also focuses upon residential real estate matters. Because real estate brokers generally find this service more valuable, it is named "BrokerDIRT." But residential specialist attorneys, title insurers, lenders and others interested in the residential market will want to subscribe to this alternative list. If you subscribe to BrokerDIRT, it is not necessary also to subscribe to DIRT, as BrokerDIRT carries all DIRT traffic in addition to the residential discussions.
To subscribe to BrokerDIRT, send the message
subscribe BrokerDIRT [your name]
To cancel your subscription to BrokerDIRT, send the message signoff BrokerDIRT to the address:
DIRT is a service of the American Bar Association Section on Real Property, Probate & Trust Law and the University of Missouri, Kansas City, School of Law. Daily Developments are copyrighted by Patrick A. Randolph, Jr., Professor of Law, UMKC School of Law, but Professor Randolph grants permission for copying or distribution of Daily Developments for educational purposes, including professional continuing education, provided that no charge is imposed for such distribution and that appropriate credit is given to Professor Randolph, DIRT, and its sponsors.
DIRT has a WebPage at:
Members of the ABA Section on Real Property, Probate and Trust Law or of the National Association of Realtors can subscribe to a quarterly hardcopy report that includes all DIRT Daily Developments, many other cases, and periodic reviews of real estate oriented literature and state legislation by contacting Antonette Smith at (312) 988 5260 or email@example.com
Your e-mail address will only be used within the ABA and its entities. We do not sell or rent e-mail addresses to anyone outside the ABA.
To change your e-mail address or remove your name from any future general distribution e-mails you can call us at 1-800-285-2221, or write to: American Bar Association, Service Center, 321 N Clark Street, Floor 16, Chicago, IL 60610
If you are an ABA member, log in to the ABA Web site at https://e2k.exchange.umkc.edu/exchweb/bin/redir.asp?URL=http://www.abanet.org/abanet/common/MyABA/home.cfm to edit your member profile. Otherwise, complete the form located at https://e2k.exchange.umkc.edu/exchweb/bin/redir.asp?URL=https://www.abanet.org/members/join/coa2.html
To review our privacy statement, go to https://e2k.exchange.umkc.edu/exchweb/bin/redir.asp?URL=http://www.abanet.org/privacy_statement.html.
If you have any problems, please contact the list owner