A house leaks.  Has the seller deceived the buyer?  Is the home inspector negligent?  Some, but not all of the questions are answered in Kazmark v Wasyln  2018 NY Slip Op 08990  Decided on December 27, 2018  Appellate Division, Third Department.

“In August 2008, defendant Jefferey M. Wasyln (hereinafter defendant) listed his residence for sale and completed a property condition disclosure statement (hereinafter PCDS) answering a series of questions regarding the condition of the property (see Real Property Law § 462). Plaintiffs signed a contract to purchase the property, hired defendant Richard J. Tarnowski to perform a home inspection and closed on the property in November 2008. Plaintiffs apparently began noticing water infiltration in the basement beginning in early 2009. In September 2011, during a regional flood, plaintiffs discovered water pouring into the basement and, upon further inspection, found mold and damage to the property’s foundation. In 2014, plaintiffs commenced this action against defendant for breach of contract, fraud/intentional misrepresentation, negligent misrepresentation and violation of Real Property Law § 465 (2) stemming from allegations that defendant knew or should have known about the material defects that he denied existed or that he listed as unknown in the PCDS. Plaintiffs also alleged professional malpractice against Tarnowski. Following disclosure, defendant moved for summary judgment dismissing the complaint against him. Supreme Court granted the motion. Plaintiffs appeal.”

“Supreme Court properly granted defendant’s motion for summary judgment dismissing plaintiffs’ claims of a violation of Real Property Law § 465 (2) and negligent and intentional misrepresentation because plaintiffs did not establish that defendant had actual knowledge of any material defect. “New York adheres to the doctrine of caveat emptor and imposes no liability on a seller for failing to disclose information regarding the premises when the parties deal at arm’s length, unless there is some conduct on the part of the seller which constitutes active concealment” (Simone v Homecheck Real Estate Servs., Inc., 42 AD3d 518, 520 [2007] [*2][citations omitted]; see Revell v Guido, 101 AD3d 1454, 1456 [2012]; Stoian v Reed, 66 AD3d 1278, 1279 [2009]). “A false representation in a disclosure statement may constitute active concealment” (Pettis v Haag, 84 AD3d 1553, 1554 [2011] [citations omitted]). However, “[t]he disclosures required on the PCDS are based solely on the seller’s ‘actual knowledge.’ Accordingly, a claim under Real Property Law § 465 (2) must allege the seller’s willful failure to comply with one or more of the obligations imposed on the seller under [Real Property Law] article 14, resulting in the buyer’s damages, and a claim for willful failure to disclose under this provision must allege that the seller had actual knowledge of a condition that was misrepresented by the disclosure contained in the PCDS” (Meyers v Rosen, 69 AD3d 1095, 1097 [2010], quoting Real Property Law §§ 461 [3]; 462 [2]).”

“Plaintiffs’ proof was insufficient to meet their burden of raising a triable issue of fact. Despite assertions that the defects existed for a substantial time, constructive knowledge does not [*3]apply to Real Property Law § 465 (2) (see Meyers v Rosen, 69 AD3d at 1098; Real Property Law § 461 [3] [limiting disclosures to seller’s actual knowledge]). The neighbors’ comments about repairs to the foundation were irrelevant without proof that the repairs were related to water problems (compare Sicignano v Dixey, 124 AD3d 1301, 1302 [2015]; Pettis v Haag, 84 AD3d at 1555). Even so, defendant acknowledged that he made such repairs, but that they resolved the water infiltration issues. Contrary to plaintiffs’ unsupported assertions that defendant installed drywall to conceal defects in the foundation, defendant and his wife testified that they finished a portion of the basement so their family could utilize more space in the home. They listed the property for sale at least 10 months after finishing the basement and had no thoughts of selling the property at the time that they made those improvements (see Gabberty v Pisarz, 10 Misc 3d 1010, 1020-1021 [Sup Ct, Nassau County 2005]). Plaintiffs assert that there are credibility issues to be addressed at trial, but these assertions are speculative and unsupported, providing no basis to deny summary judgment (see Nomura Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP, 26 NY3d 40, 52 [2015]; Meyers v Rosen, 69 AD3d at 1098).”