A homebuyer accepted an offer to purchase the home of a couple that was moving out of state. Due to the age of the house, the listing realtor suggested that a prelisting inspection, including a termite inspection, be conducted before listing the property. The sellers had the house professionally inspected. The inspection showed some evidence of termites, but they were assured that there was no evidence of damage. The sellers then listed the house for sale and signed a seller disclosure form pursuant to KRS 324.360. On the form they disclosed their knowledge of the condition of the house. Additionally, the sellers disclosed the evidence of termite infestation and no apparent damage on a disclosure form provided by the Lexington-Bluegrass Association of Realtors and indicated that an additional inspection was scheduled consistent with the disclosure form. Shortly thereafter, the home was professionally treated for the termites and the sellers moved out of state. The buyer had the house independently inspected twice and treated as part of the closing and closed on the house. Almost a year later the homebuyer filed an action for fraud against the seller in circuit court, alleging the seller had materially misrepresented the condition of the house. MGM successfully defended the sellers by obtaining a summary judgment, which was affirmed by the Court of Appeals and the Supreme Court of Kentucky.
Real estate/real estate disclosure form/adequate disclosures/termite damage/residential real estate/hidden defects
