Riley V. Jackson

Riley v. Jackson

Relevant Facts

In the case presented, the plaintiff (Riley) is suing the defendant (Jackson) for allegedly selling him a home in the Township of White Plains without releasing material information about the property. The plaintiff made known to the defendant when he visited the property that he wished to make an addition to the house because it was too small and there was plenty existing land. The advertisement for the property stated that it had an "expansive lot." The defendant was aware that there could be a possible zoning ordinance for that particular area that would prohibit construction on the existing land, but didn't disclose this information to the plaintiff, who had no prior knowledge of the possible ordinance. The new zoning law passed on June 24th, 2002, only a week after the closing meeting for signing the property and three days after he meets with his architect to final plans on the addition.

Applicable Law

In the course of selling or leasing a property, a real estate agent makes statements to the intending purchaser about the property. Purchasers, who believe that a broker failed to advise them of material information, or made false representations, generally seek relief on theories of either negligent representation or common law fraud. Ordinarily, in the absence of fraudulent concealment under common law, a real estate agent does not owe an independent disclosure to the buyer. Sometimes, however, a duty may arise, such as where a broker voluntarily furnished information.

As a fiduciary, a licensed real estate broker must exercise the utmost good faith and loyalty in his duties for his client under common law/tort fraud theories. Traditionally, a real estate broker was protected from such litigation by the legal theory of caveat emptor- "let the buyer beware." However, courts and commenters have criticized caveat emptor as inapplicable to contemporary society and define it as a defense in real property transactions. In a decision made by the courts in Carrel v. Lux (1966) and Bevin's v. Ballard the following observations were made: (1) the court held that the defendant (real estate agent) made material misrepresentations and thus, real estate agents have an affirmative duty to accurately represent the land and all facts pertaining to the value of the property. (2)The court held that in a land sale, the broker has a duty to provide accurate information when the broker becomes aware of suspicious facts regarding his/ her representations. (3) As a public policy, brokers hold themselves out to the public to have special knowledge. The broker creates a liability when he/she fails to investigate that which is suspicious of dubious about the listing materials.

When pertaining to government zoning laws, there are exceptions or existing uses. Newly