Real
Cases in Real Estate
is a weekly update on real estate law, with legal principles illustrated and
explained by lawsuits from around the country. The topics are wide-ranging for
appeal to a broad spectrum of readers including lawyers, homeowners, investors
and the general public. Andrea Lee Negroni, a Washington DC
attorney and legal writer with 25 years of experience in financial services and
mortgage law, contributes the case summaries.
Followers of
Real Cases in Real Estate will learn and be entertained by lawsuits
involving nuisance, trespass, zoning violations, deed restrictions, title
insurance, public utilities, mechanics liens, construction defects, adverse
possession, foreclosure and eviction, divorce and marital property rights,
tenants' rights, and more. Real Cases in Real Estate uncovers the
unpredictable, amusing, and sometimes outrageous disputes between next-door
neighbors, contractors and homeowners, condo boards and residents, real estate
brokers and homebuyers, and zoning administrators and developers.
Each fully
cited case summary highlights the essential law of the case and explains the
principal legal theories and concepts relevant to the outcome. Plain language
treatment makes Real Cases in Real Estate accessible to lawyers and
laymen alike.
Whether you
follow real estate law professionally or as a hobby, you'll find something new
and useful every week in Real Cases in Real Estate.
Updates
for the Week of February 29th, 2012
The Tennessee Consumer Protection Act protects the purchaser of a
new home from a builder.
The construction litigation that
followed Scott and Sandie Campbell's purchase of a $240,000 home from
father-and-son builders Junior and Terry Teague led the Tennessee Appeals Court
to review the applicability of the consumer protection act to residential real
estate purchases. The Campbells wanted a well-built new home because Mrs.
Campbell had a fear of tornados. The Teagues contracted with them to build the
home and offered a one-year builder's warranty. The problems with the home were
evident from the start, but the Campbells closed anyway and relied on the
Teagues to correct problems after closing. Despite their promises, the Teagues
did not respond to the Campbells' many requests for repairs.
A construction expert testified at
trial about the five major construction problems, including moisture
infiltration, mildew and decay, bad construction of the main floor, bad
construction of the roof and attic, and mineral streaking on the main floor.
The Campbells sued the Teagues in 2004 and reached a partial settlement in
2006, requiring the builder to buy back the home. The Campbells reserved the
right to seek consequential damages and attorneys fees under the Consumer
Protection Act. At the trial, the Campbells were awarded $169,000 in damages
for losses ranging from lost wages to moving expenses, including mortgage
interest, interest on their down payment, repairs they made to the home, and
other items. The builder was awarded $29,841 in setoffs of the award, most of
which was attributed to a rental fee of $700 per month for the Campbells' period
of occupancy.
The builder argued that the
Consumer Protection Act (TCPA) should not apply because they bought back the
home. The appeals court disagreed, interpreting the law liberally to protect
the consumers of the state. The court declared the unworkmanlike construction
both deceptive and unfair because it caused substantial injury to the consumers
that were not reasonably avoidable by them. Moreover, the court held that the
Teagues, whose license permitted them to build homes up to $200,000 in value,
were in automatic violation of the TCPA when they built a home for $240,000,
because they were not properly licensed to build the home they contracted for.
The case reviews the implied warranty of good workmanship and
materials applicable to newly built dwellings in Tennessee. This principle
warrants to the initial buyer of a new home that the home and its fixtures have
no major structural defects and the construction is workmanlike, meeting
standards of workmanlike quality prevailing at the time and place of
construction. The implied warranty applies only when the home construction
contract is silent on warranty terms; it may be waived by the buyers, or
altered by contract. However, a waiver of the implied warranty is ineffective
if it does not give express notice to the buyers of the implied warranty they
are waiving.
The lawsuit revealed that the
Teagues breached their contract with the Campbells, built a sub-standard home
for them, repeatedly failed to respond to their requests for repairs, were
improperly licensed, and the buyers' consequential and incidental damages were
reasonably foreseeable. The Campbells used the Tennessee Consumer Protection
Act to secure a broad range of consequential damages from the Teagues, plus
attorney fees for their lawsuit and its appeal.
Campbell v. Teague, 2010 Tenn. App. LEXIS 239 (March 31, 2010) [enhanced version available to lexis.com subscribers].
....
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