A Minnesota buyer, Olivia, purchased a home that was sold 'as-is' by the seller's estate through a personal representative. The personal representative signed the Seller's Property Disclosure Statement indicating no known defects. After closing, Olivia discovered extensive undisclosed water damage that had been concealed behind freshly painted walls. The estate claims immunity from disclosure liability because estate sales are an exception under the Minnesota Residential Real Property Disclosure Act. Is the estate's claim of immunity correct?

Correct Answer

D) No, the exception applies only when no disclosure statement is provided; because the personal representative voluntarily provided a disclosure statement, the estate is bound by its representations and may be liable for material misrepresentations

Under Minn. Stat. § 513.52–513.60, certain transfers are exempt from the mandatory seller disclosure requirement, including transfers by a personal representative of an estate. However, this exemption means the seller is not required to provide a disclosure statement. If the personal representative voluntarily provides a disclosure statement, the estate is bound by the representations made in that statement. A disclosure statement that affirmatively states 'no known defects' when defects were concealed (even if the personal representative did not personally know about them) can create liability for misrepresentation, particularly if the concealment was done by or on behalf of the estate. The voluntary provision of the disclosure statement waives the exemption's protection regarding the statements made.