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Let the Seller Beware

November 30, 2021

The Cincinnati Area Board of Realtors®, Inc. residential real estate Contract to Purchase became effective October 1, 2021. New Section 28 of the Contract contains several “general” provisions.  One of those provisions could potentially have a very big impact on sellers. The second sentence states that “Any and all Seller certifications, representations and/or warranties contained herein shall survive the actual date of closing for a period of One (1) year.

Under Ohio law, Sellers and their counsel have historically relied upon the doctrine of caveat emptor, roughly translated as “let the buyer beware.” Simply stated, unless the seller has committed fraud or misrepresented or concealed defects in seller representations, certifications and/or warranties, for example, those seller certifications made in the Ohio Residential Property Disclosure Form, the buyer has to rely upon his/her/their own inspections of the real estate.

Of significance is that Section 14 of the Contract, starting at line 228, states that: “Buyer is relying upon Buyer’s examination of the Real Estate (personally or by Buyer’s inspectors and/or contractors), the Seller’s representations and certifications, including those made herein, under the Ohio Residential Property Disclosure, and under the Lead Based Paint Disclosure, if any.

Based upon these new provisions, and despite the results of the Buyer’s own inspections or home inspection report, the Seller may be liable and held responsible for defects regarding the real estate discovered within one year after closing. The seller and seller counsel’s reliance upon caveat emptor may be eroded by these new provisions.

In addition, Ohio real estate law recognizes the doctrine of merger-that is, that all terms of the Contract to Purchase merge at closing of the sale of the real estate, with the seller’s delivery and buyer’s acceptance of the deed without qualification. Exceptions to the doctrine of merger include false representations, evidence of fraud or mistake, the deed was accepted with protest as to reservation of rights, or the purchase contract creates rights collateral to or independent of the conveyance, or states that certain provisions do not merge and survive the delivery and acceptance of the deed. The latter precept may be argued by buyers and their legal counsel, as these new contract provisions potentially circumvent legal principles that have been relied upon by Ohio residential sellers for years.

Sellers and real estate agents should consult legal counsel with questions regarding the legal ramifications and any concerns they may have regarding sellers’ ongoing liability created by these new provisions.

About the Author

Roccina S. Niehaus

Roccina S. Niehaus

Roccina Niehaus focuses her practice on residential and commercial real estate law.

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