A seller in Medford, Massachusetts knowingly fails to disclose to the buyer that the property's basement floods during heavy rain, a condition the seller has experienced repeatedly. The Purchase and Sale Agreement contains an 'as-is' clause and a standard caveat emptor provision. After closing, the buyer experiences flooding and discovers the seller knew about the problem. The buyer consults an attorney about potential claims. Under Massachusetts law, which statement MOST accurately describes the buyer's legal position?
Correct Answer
C) The buyer may have a viable claim under MGL Chapter 93A because the seller's knowing concealment of a material latent defect constitutes an unfair or deceptive act, notwithstanding the 'as-is' clause
This is a classic Massachusetts Chapter 93A trap question. While Massachusetts follows caveat emptor and 'as-is' clauses are generally enforceable, they do NOT protect a seller who knowingly conceals a material latent defect. MGL Chapter 93A prohibits unfair or deceptive acts in trade or commerce. The Massachusetts Supreme Judicial Court and Appeals Court have consistently held that a seller's knowing concealment or active misrepresentation of a material defect — such as chronic basement flooding — constitutes a deceptive act under Chapter 93A, even when the P&S contains an 'as-is' clause. The buyer may be entitled to double or treble damages and attorney's fees.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
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