Why You Need Representation in Real Estate Transactions

First of all, it is to your advantage to have representation. Why?  Because a licensed salesperson has more knowledge than you of market conditions.  Most of us who have licenses (two lawyers in this firm are licensed brokers), monitor listings and sales in the professional MLS.  This site provides more information than available in public services such as Zillow.

If you are not represented and want to go to an open house, when you are asked if you are represented, say yes and give the name of either Jim Tupitza or Robert Hulnick.  Consider us to be place holders.  If you like the house and later want a specific agent from a brokerage company to represent you, we will step aside and let that agent take over.  If you want to hire us to make an offer, we are available.

If you do agree to buy a home remember that the price of title insurance is the same everywhere.  It is set by then PA Dept of Insurance.  The difference here is that when we have the title order, you will have a real estate lawyer at closing for no  additional cost. Call us at 610-696-2600 or 610-719-8100

Impact of Lawsuits on Realtor Commissions

The buzz after the first round of law suits against Realtors® has died down.  The second and third rounds are coming.  What does this mean to you?

SELLERS: Be aware that buyers will be asking you to pay for their agent.  Be prepared to negotiate. When listing, you should negotiate the commission amount to the listing agent based on that agent only and not on having to pay money to a buyers’ agent.

SELLERS’ AGENT:   Delete paragraphs 6 and 7 from the PAR® form XLS.  Advise the Sellers that buyers will negotiate directly with them and that you will not be part of any discussions for you to pay a co-operating broker fee.

BUYERS:  You have a contract with an agent.  Make sure you understand that either you will be paying the buyers’ agent fee outside closing or that the seller will pay. If the sellers will be paying. On the PAR® form Agreement of Sale, in paragraph 3(A) delete everything  from “In addition to any…. to the comma.  Then fill in the buyers’ agent fee you want the Sellers to pay.

BUYERS’ AGENT:  If you do not have a written agreement with the buyers setting out your fee, you should not be spending time showing houses.  Tell the buyers you will be preparing their offers with a paragraph providing for a commission to you.  If you have a buyer willing to offer $X and they are competing with a buyer making the same $X offer with no agent, raise the amount of the offer to $X +Y% so the commission can be part of the mortgage funding.

REALTORS®:   Never discuss a commission with another agent.

If you have a question call us at 610-696-2600. We are here to help. Two of the lawyers in the firm are licensed real estate brokers.

Navigating Buyer-Seller Disputes: The Role of Inspections

The market is unusual, with buyers skipping inspections to secure homes, altering the dynamics of buyer-seller disputes.

THE BETTER OFFER

          Imagine a survey with this question:  Which is a stronger offer on a Home: a) full price, cash, no inspections, or b) full price, cash, all inspections?  Your response will be the same as 99.9% of the Sellers, Buyers and real estate licensees.  You will pick a).

          You are mistaken. Here’s why: A buyer purchases your home with no inspections.  Later, they discover a small roof leak causing mold in the wall. Further inspection reveals the roof needs new decking, joists, and major repairs. With an estimate of $30,000, they turn to lawyers.  The lawsuit against you (which we will dissect later in this article) claims: 1) breach of the Sellers Property Disclosure Act, 2) fraudulent misrepresentation, 3) negligent misrepresentation, 3) innocent misrepresentation, 4) breach of contract, and 5) violation of the PA Unfair Trade Practices and Consumer Protection Act.

          Let’s skip the mediation and go straight to the trial, where you’ll regret the buyer didn’t have inspections. Without inspections, you’ll testify that you didn’t know about the roof leak or mold. The jury will think you must have noticed something, as the buyers did so immediately. You’ll be held responsible and end up paying for mold remediation and a new roof, even though the roof was 18 years old.

          BUT, let’s imagine your buyer had an inspection.  That buyer will be faced with this line of questions on cross-examination from your lawyer (if she or he has any experience):

  • You would agree with me that you knew you wanted an inspection?
  • You would agree with me that there are things that a non-expert will never notice when inspecting a home?
  • You would agree that not everyone can be a home inspector?
  • You would agree with me that you asked for recommendations for a professional home inspector?
  • You would agree with me that you picked the top inspector in the field, as recommended by your real estate agent and others?
  • We can agree that you were there for over 4 hours with the inspector?
  • We can agree you thought the inspector was very thorough?
  • In fact, didn’t you tell your real estate agent that the inspector was a bit of a “piss ant”?
  • We can agree that you got a written inspection report from the inspector?
  • I direct your attention to Defense Exhibit 7, the inspection report.  You would agree it mentions on page 6, that there is a small water stain on the ceiling of the southeast bedroom?
  • You would agree that you did not look into the source of that stain?
  • You would agree that on page 11 it mentions a slight dip in the roof?
  • We can agree that you never noticed that dip?
  • We can also agree that you never looked into the cause of that dip?
  • We can agree that if the professional home inspector did not point out the dip in the roof, or the small water mark, you would never have seen them.
  • We can agree the inspector did not report evidence of mold?
  • So, let me see if I get this right, you want this jury to believe that my clients, had Superman Eyes and they were able to see things that only a very accomplished professional home inspector was able to see in a four-hour inspection, and in fact see mold that even the inspector did not see?  Is that what you are trying to tell this jury?
  •  Then after a long pause and no answer from the witness, your lawyer (bowing to that classic example of trial practice, “My Cousin Vinny.”) points to the jury and says “ you can tell them, they know…”

Dissecting the  Plaintiffs’ Case

1) Breach of the Sellers Property Disclosure Act.  This type of claim gets the Buyer (Plaintiff) around one of the technical defenses often raised.  Sellers will often point to a clause in the PAR® Agreement of Sale found in paragraph 25(A), which in the law is called an integration clause and claim the Sellers Property Disclosure cannot come into evidence because of something called the parole evidence rule.  That argument fails as to this claim.  However, a seller is only required to disclose what they actually know.  There is no need to inspect or study things.

2) Fraudulent Misrepresentation.   This claim requires a “smoking gun.”  Examples: a proposal from a roofer 2 months before you listed the house which provides a price to repair the “defective leaking roof.”  There are three reasons this type of claim generally fails where there is no smoking gun: 1) the burden of proof for fraud is “clear and convincing evidence,” 2) the Court will probably rule that the case is really a breach of contract case and that the “Gist of the Action Rule precludes a tort claim (non-contract claim), 3) the Court may also rule that the “Economic Loss Rule” precludes recovery in tort for a contract claim.

3) Negligent Misrepresentation.   Here, we are back to everything above except the heightened burden of proof.  However, the contributory negligence rule provides that if the Plaintiff is even 1% responsible, there is no recovery.  

3) Innocent Misrepresentation.   This again is subject to the Gist of the Action Rule and the Economic Loss Rule, but on the surface, it seems easier to prove.  Here is the problem, our appellate courts have held that if you win, the only remedy is recession and restitution.  The seller gets back the house and you get what you paid.

4) Breach of Contract.  This a problem for most Plaintiffs, but the best defenses are often missed.  What is the best defense.  If the Buyer did an inspection (remember we already figured out that we want the buyers to inspect) and found an issue that needed to be addressed, paragraph 13 of the PAR® Agreement of Sale comes into play.  If the buyers submit a written proposal and you as the seller accept it, the buyer is bound to buy the house as is and give you the release set forth in paragraph 28 of the contract.

5) Violation of the PA Unfair Trade Practices and Consumer Protection Act.  Here is where things get sticky for a Seller.  Section 201-2 of the UTPCPA lists things that the legislature considers to by unfair trade practices.  It is subsection xxi that creates the problem.  It used to require fraud.  It was changed to read “Engaging in any other fraudulent of deceptive conduct which creates a likelihood of confusion or of misunderstanding.”   Let’ forget the fraudulent conduct for a moment and focus on the word “deceptive.”  This takes ups back to the misrepresentation claims discussed above.  There are three elements of misrepresentation or deception: a) an untrue statement, b) reliance on that statement, and c) damages which flow from that reliance.  If the Buyer had an inspection and even if the “tip of the iceberg” is showing, the element of reliance is defeated.  One cannot be confused by a representation or have a misunderstanding based on a misrepresentation if there was no reliance upon the representation.  If successful, the Court has the power under this statute to award treble damages and attorneys’ fees. 

ARE CHATBOTS REPLACING LAWYERS?

You have a legal question.  What can you do?  You can go to a lawyer and pay for the correct advice in context.  You can go to AVVO and get a general answer, or you can ask a chat bot.  Or can you?  Do chat bots know the  law?

          I posed a question for which I knew the answer.  In Pa if you want to make a warranty claim against the builder of your home, must you first provide notice of the claim and an opportunity to honor the warranty. This seems rather obvious.

          Consider the results of asking ChatGPT:

QUESTION In PA, if you bar a contractor from returning to complete the work or honor warranties, are you barred from suing for damages

ANSWER If you bar a contractor from returning to complete the work or honor warranties in Pennsylvania, you may still be able to sue for damages, but it will depend on the circumstances surrounding the situation.

Generally, if you hired a contractor to perform work on your property and they breached the contract by failing to complete the work or honor warranties, you may be able to sue them for damages. However, if you prevented the contractor from completing the work or honoring warranties by, for example, refusing to allow them back onto your property, it may be more difficult to prove that the contractor breached the contract.

If the contractor has not breached the contract, but you still bar them from completing the work or honoring warranties, you may be considered to be in breach of the contract yourself. In this case, the contractor may be entitled to damages for the work they did perform, as well as any expenses they incurred as a result of your breach of the contract.

It’s important to note that the specific terms of the contract, as well as the circumstances surrounding the situation, will play a significant role in determining whether you can sue the contractor for damages. It’s always best to consult with an attorney who is familiar with Pennsylvania contract law to understand your legal options and potential remedies.

Let’s ask about cases supporting these generalizations.

Let’s ask for some more authority.

The Chat Bot provides more cases. This seems to be too easy.

Let’s go deeper into the question. We ask “what if the Property owner has a warranty claim and just fixes thing herself?” “Can she still sue the builder?”

BUT the Bell and Ruzicka cases do not exist.

The Bot is caught and plays the misunderstood card.

I press the issue

The result? We are not ready to get rid of all the lawyers as Shakespeare suggested. But can we now apply the legal maxim falsus in uno falsus in omnibus (If the witness lied about one thing, you as the jurors may assume they lied about everything) to the Bots. Seems to me they are currently not acquainted with the truth.

PAPER STREETS

Over the years we have had numerous matters involving “Paper Streets” in various counties all across the street.

What is a Paper Street?  This type of street is a product of the times before municipalities enacted Subdivision and Land Development Ordinances.  At that time a landowner would simply have an engineer prepare a survey of his or her property and then lay out lots, streets and alleys.  Not every lot was built upon and not every street or alley was opened and improved.  After the streets or alleys were shown on a plan and after either the plan was recorded or a lot shown on the plan sold, public and private rights were created as a matter of law in each of the streets or alleys.

Let’s start with the public rights.  By virtue of the recording of the plan or sale of a single lot, the local municipality obtained the right to improve or open the street or alley and hold it as a public street.  No condemnation was necessary.  There was a catch.  The municipality had 21 years to improve the area, or all public rights evaporated. When the public rights evaporate, the title line of the adjoining lots MOVES to the center line of the proposed street or alley, subject to private rights.

Private rights are different from public rights.  EVERY owner of EVERY lot shown on the plan creating the streets or alleys retained the right to use the street or alley.  Because some of these streets existed only on the survey or recorded plan, they became known as paper streets. These private rights exist even though a particular owner’s lot may be 3 or 4 blocks away from the paper street.   For this reason, any time a person owning land next to a paper street wants to make a claim to the street, they must name as a mandatory party EVERY owner of EVERY lot shown on the plan.  If they cannot readily find the plan, they have to keep looking by searching title to every lot in the area until they trip on the first lot out of a common owner.

Paper streets are sometimes not logical. We recently dealt with one in Shaler Township, Allegheny County.  The street probably looked good on a flat piece of paper.  In the real world, the street dropped down a cliff onto Route 8. The same thing occurs across the state.  Fortunately, modern subdivision ordinances are preventing the creation of new paper streets.

What do you do if you have a paper street or alley behind your house?   First of all, you have the right to record a deed from yourself to yourself, moving the lot line to the middle of the paper street.  But what if you want to block off or terminate the private rights of your neighbors? Our Courts have held that it is not easy to do this.  Generally, you need to prove a act by each holder of the private rights which indicates an intent by that person to terminate their own rights.  Absent that, you need to do something to absolutely block the paper street.

Is a fence or garden enough?  Our appellate courts have said no.  So, what does work?  We had a case in Chester County where we represented a church with a paper alley separating the church building from a buildable area to the rear.  We wanted to make the termination of private rights clear. Since the issuance of a building permit may not be denied for title issues, our client built an addition to the church across the entire alley.  It was constructed in a manner that the portion on the alley could be removed if a neighbor raised a fuss.  No when raised a fuss until more than 21 years later when one neighbor wanted to open the alley and put in a garage.  OOOPS.  She was too late.  In another case a client was successful because they had created a blockage using Jersey Barriers.

We have one now in Lebanon County.  A property owner sought to claim that by mowing the lawn on the paper street and only paving part of it, he had obtained title by adverse possession.  The Court ruled that he did have title absolutely and that the Order did not interfere with easement rights.  The problem is the title records.  A Court Order granting a party title in the paper street would generally be interpreted by the public (and a prospective buyer) as terminating private rights.  The Fifth Amendment to the US Constitution prohibits this result, but there is nothing in the public record to avoid litigation over this issue.  We were brought in to handle the appeal to the Superior Court.

Lower Merion Township, in Montgomery County, is riddled with paper streets. While there has been some litigation over these streets, most has been avoided because of the number of parties one would be forced to name in litigation.

SAD NEWS

With great sadness, we announce that we have lost one of our key people this week. Viola “Oley” Whitfield joined our team in 1977. She cleaned our offices, kept them sanitary and always had a smile and kind word. She will be sorely missed

VIOLA’S OBITUARY

Life began for Viola “Oley” in West Chester, Pennsylvania on October 28, 1932. She was born the daughter of the late Julius Anderson and Gertrude Saddler Hill. On April 15, 2021 God called Viola home peacefully passing away in West Chester,Pa. She was the last of 10 children.

Viola was a student in the West Chester school system. Viola then went on to work at New England Cleaners and Orth Cleaners as a presser, also Viola took pride in her cleaning job. She was able to clean for West Chester University and the offices of James Tupitza, Saling,Litvin, & Hambleton and Dr. McCausland.

She leaves to cherish her memories 2 sons: Gregory Whitfield of West Chester, Pa and David Whitfield(Vida) of Downingtown, Pa. 2 daughters: Zelda Whitfield of Coatesville,Pa, Eva Whitfield-Scott of Coatesville,Pa. 13 grandchildren,35 great-grandchildren. Her lifelong best friend Emily Purnell. As well as many nephews, nieces, cousins and friends. Preceded in death by her parents Julius Anderson Sr & Gertrude Hill, her son : Duke A.Whitfield and her daughter Deborah Lee Anderson.

A Win at PA Supreme Court

Last year we won a case at the trial level where Deutsche Bank, represented by a very large New York law firm, assisted by one of Philadelphia’s largest law firms sued our client. The case was an attempt at collecting on a claim of $350,000,000.00. ($350M) The Superior Court upheld the lower court and our victory. Deutsche Bank appealed to the PA Supreme Court, which refused to accept their appeal. David vs. Goliath!!!

OPEN FOR BUSINESS

West Chester, March 30, 2020

We have noticed many businesses were not ready for a disaster. Their phones are being forwarded to an employee’s cell phone. They cannot get at the files on the in-house servers. The have not figured our how to meet with clients, except by phone.

We are fully open for business. Many years ago we abandoned premises base phones in favor of Voice Over IP (VOIP) phones. This enables us to have 100% access to all features of our phone system from anywhere. That’s anywhere in the world. We took our office paperless so all files have been scanned. While we still have on premises servers, they are mirrored in the cloud and were scheduled for retirement April 30.

More importantly we have fully implemented Microsoft Teams® as a primary communication and collaboration tool. We are able to communicate with clients in a secure manner, even when they have Gmail accounts (where Google reads every email and sells the data). All of our Teams® messages are fully encrypted end to end. Teams® allows us to have video conferences and to share what we are seeing on our computers or theirs.

Our related title insurance agency is conducting closing using a combination of technology and social distancing. As an insurance agency it is exempt from the governor’s order to close.

Its a whole new world, but I thank our staff for adopting new technology.

Our Policy During Coronavirus Outbreak

Technology will keep us open and serving.

The health and safety of our clients and staff is our foremost concern during the Coronavirus Outbreak. We will continue to provide legal services, but not in the traditional, come in and meet with your lawyer, mode.

ALL client conferences will be conducted using phones or our video and document sharing technology. Here is how it will work:

— Mary will be available to answer the phones. She may be at her home, sitting at the kitchen table, but it does not matter. Our entire staff is equipped with phones that work over the internet (VOIP Phones). That is how they work in the office and they work equally well at home.

— We have the ability to create a Microsoft Teams® site for every client. What does that mean? First of all you do not need to buy anything. Of course, you will need a home computer with internet access. At the appropriate time we will send an you an invite to your team. You will be able to download the Teams® software free of charge. Within the site you will be able to upload documents and download documents from your file. You will be able to securely message us, with all messages encrypted end to end. If we schedule a conference with you, you will have the ability to have a video face to face meeting (or you may turn your camera off). The advantage of a video conference will be the ability to share documents and images appearing on both of our computer screens.

This will take some adjustment, but it is better than simply closing the doors. If you have questions, call us at 610-696-2600.

Lehman Property Management Closes

Property Owners may be Holding the Bag

The sudden closure of Lehman Property Management may leave owners of 329 Harrisburg area properties holding the bag. They will be looking for their rents, their security deposits and more. The owner, Glenn Lehman suggests he “found irregularities” in the accounting process and then laid off 24 employees. That tells me lots of money is missing and he will play the delay game. If this was a small irregularity, those 24 people would be correcting everything and producing revised reports to the owners.

Property management companies are like brokerage companies. They must have a broker of record who supervises the conduct. Look elsewhere on the this web page and you will see we already sued that broker and collected $1M this year from her insurance company. We have 2 other cases pending.

Because this case will involve numerous small claims, the owners must band together and get a 150 car freight train on the tracks pursuing the broker and the company.

There is a private group in Facebook for victims of this company. Members of that group will be having a legal conference call Monday August 19 at 3 p.m.