What Counts As A Misrepresentation In Real Estate Law?

One of the main reasons a home seller or broker will likely want to hire a real estate law firm to help them is to address possible misrepresentations. Even an innocent misrepresentation can blow up a deal, or worse, lead to allegations of fraud. Given how problematic misrepresentations are, you'll probably want to know what makes a statement misrepresentive.

Material Features

When someone is purchasing a property, they want to know basic things about the place. These material features inform their ability to understand what it is they're buying. If the seller misrepresents the material features of a property, the buyer may have legal grounds for withdrawing from an agreement. Likewise, if the misrepresentations remain unknown until after the sale is over, the buyer may be able to sue the seller for economic damages. Some material features are fairly obvious. The dimensions of a property, for example, are material features. So too are the amenities on the property. The flaws of a property also fit in this category. If a house was built on top of a reclaimed waste facility, that's something a buyer would want to know before they put down money.

Anything that materially influences the value of the property is a feature, too. This can get fairly weird, with materiality coverings things like whether a building is considered haunted or was the site of an infamous crime. However, the law requires these sorts of claims to be common knowledge within the nearby community. One person saying a house is haunted isn't material, but generations of people saying the place is haunted probably is material to the value of the property.


In the strictest legal sense, disclosures and representations are separate things. Most people would consider them very close cousins, though. Disclosures cover issues that aren't necessarily material to the property's condition and value but are still worth knowing. A seller must disclose if there are any standing issues with the title, such as easements, liens, or pending legal actions.

Types of Misrepresentations

The law recognizes three kinds of misrepresentations. Innocent misrepresentation involves something a seller simply overlooked, such as forgetting a number in the listed size of a house. Negligent misrepresentation also involves something they overlooked, but it is something that a reasonable person would have thought to check, such as the condition of the foundation. Finally, there is fraud, a deliberate misrepresentation meant to inflate the property's value or prevent the buyer from discovering a known flaw.