The Square Footage Is 4,300, Not 5,500 As Represented!
Can I Sue?

      Sellers  and  their brokers can be expected  to  extol  the
virtues  of  the home or business for sale.  At what  point  does
mere  opinion, which turns out to be erroneous, become actionable
misrepresentation?

      In  a recent California Court of Appeal decision, the Court
reports that an individual purchased a residence and claimed that
the  seller  and his real estate agent misrepresented  its  size.
The  agent  advised  the purchaser that the  residence  contained
approximately 5,500 square feet.  As it turned out, the  size  of
the residence was about 4,300 square feet.

      The seller and the real estate agent listed the property in
the  Multiple  Listing  Service.  The description  included  "APX
5500",  which  means  approximately 5,500 square  feet.   At  the
bottom  of  the  listing,  the  following  statement  was   made:
"Information Deemed Reliable But Not Guaranteed."

      A flyer was printed and distributed regarding the residence
which  also  stated at the bottom as follows:  "Above Information
From Sources Deemed Reliable But Not Guaranteed."

      The  real  estate  agent indicated that  she  obtained  the
information  regarding square footage from the seller's  daughter
who  told her that "the architectural plans used to construct the
property  stated the house was 5,500 square feet."  The  decision
also reports that the daughter and her husband were the owners at
the  time  the house was constructed and that the agent  obtained
the  information from her because her father, the current  owner,
did not speak fluent English.

     The agent advised that she

                "relied on this information .  .  .  in
          submitting it to the Multiple Listing Service
          [and] declared that in her several visits  to
          and  visual  inspections of the property  she
          saw  no  indication that the  house  was  not
          5,500  square feet.  She declared that at  no
          time prior to close of escrow did she hear or
          have reason to believe that the house was not
          5,500 square feet."

      The complaining purchaser, self-employed as a stock trader,
and  holding a bachelor's degree in business administration  from
the University of Southern California, was endeavoring to

                "diversify  by investing in residential
          real estate.  He was looking for bargains  or
          distress  sales.  He previously  bid  on  two
          properties  in  Beverly Hills which  were  in
          foreclosure,  but his bids were  rejected  as
          too  low.   His theory of investing  in  real
          estate  was to find bargains on a per  square
          foot  basis.   His  prior  two  bids  on  the
          Beverly Hills properties were based on square
          footage,  after he obtained comparable  sales
          information from a broker."

     As the litigation proceeded, the real estate agent could not
produce  a  declaration by the seller's daughter  confirming  her
comment and the architectural plans submitted in evidence  showed
only  5,334 square feet rather than the 5,500 square feet claimed
to exist.

      The  seller and his real estate agent pointed out that  the
purchaser signed a contract providing that "Buyer is . . .  aware
that Broker makes no representations with respect to . . . square
footage   of  the  subject  lot  or  the  improvements   thereon.
Information,  if any, on square footage provided in the  Multiple
Listing  Service, including, without limitation, room sizes,  and
information  materials concerning the Property are approximations
only.   By  obtaining  a  survey of  the  Property  or  having  a
professional  appraiser measure the Property,  Buyer  may  verify
actual . . . square footage."

      The  trial  court  sustained the defendants'  position  and
granted   a  motion  submitted  by  the  defendants  for  Summary
Judgment,  a  procedure by which a court will grant  judgment  if
declarations submitted on behalf of the parties "show that  there
is  no  triable issue as to any material fact and that the moving
party is entitled to judgment as a matter of law."  The Court  of
Appeal reversed this decision of the trial court and ordered  the
matter to proceed to trial.

     The Court of Appeal observed that "a statement couched as an
opinion, by one having special knowledge of the subject,  may  be
treated  as  an actionable misstatement of fact", citing  another
case  in  which an owner salesman asserted that a foundation  was
properly built when in fact it was not.

     Whether a statement is merely an opinion for which no action
may be brought or is an actionable misrepresentation of fact is a
question of fact for the jury.  The Court thus concluded that:

                "Given  the rule that an owner of  real
          property is presumed to know the size of  the
          property  and  that  a  buyer  is  ordinarily
          entitled    to    rely   on    the    owner's
          representation of size without having to hire
          an  expert  to discover its falsity,  a  jury
          could   reasonably  find   that   a   grossly
          erroneous  "approximation"  of  size  is   an
          actionable misrepresentation."

      The  moral  of  the story?  Whether selling  a  home  or  a
business, think before speaking.  You might have to later explain
your words to a jury!

[This column is intended to provide general information only  and
is  not intended to provide specific legal advice; if you have  a
specific  question  regarding the  law,  you  should  contact  an
attorney  of your choice.  Suggestions for topics to be discussed
in this column are welcome.]


Reprinted from New Era Magazine
Myles M. Mattenson © 1998-2002