Because of concern over the basement water stain mark, the seller, the buyer and the broker each had an expert contractor review the basement water problem. The experts' reports agreed that the problem with the water in the basement was more serious than the disconnected downspout, but disagreed over the best method of remediation. The trial court held that the buyer had waived any defects by closing when he had full knowledge of the defective condition of the basement, and that any damages the buyer had suffered were the result of his own actions. The court also held that once the buyer learned that the seller's representations were false, he could not justifiably rely on them. It was negligent for the buyer to rely on the seller's representation regarding the basement water stain mark once he had the experts' reports.
Justifiable reliance is an element of a claim for misrepresentation.
Accordingly, the court of appeals upheld the trial court's finding in favor of the buyers. There are other remedies for a misrepresentation in a RECR, or a defect that is not mentioned in a RECR, besides rescission of the offer to purchase. 895.80 in fact allows the court, in its discretion to award all costs and attorneys fees, and to treble the damages - the court chose not to do so in this case. Although the buyers in the Lambert case did use a home inspector, the buyers in the Stathus case apparently did not. Most homebuyers throughout the United States insist on having home inspections performed prior to making a purchase, according to recent telephone polls.