A seller in Evansville, Indiana discloses on the Seller's Residential Real Estate Sales Disclosure Form that the HVAC system is in good working condition. After closing, the buyer discovers the furnace has a cracked heat exchanger that the seller knew about before completing the form. The buyer sues the seller. Which statement most accurately describes the seller's legal exposure under Indiana law?
Correct Answer
B) The seller may be liable for fraudulent misrepresentation because the disclosure contained a known false statement about a material condition
Under IC 32-21-5, a seller who knowingly makes a false statement on the Seller's Residential Real Estate Sales Disclosure Form regarding a material condition of the property may be liable for fraudulent misrepresentation. A cracked heat exchanger is a material defect affecting safety and habitability. The seller's knowing false statement that the HVAC was in good condition creates significant legal exposure, including potential liability for damages exceeding just the cost of repair.
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