Patricia is selling a duplex in Eau Claire, Wisconsin. She is aware that the property's electrical panel was flagged by a licensed electrician two years ago as being undersized and potentially unsafe, but she made no repairs. She completes the RECR and checks 'No' for electrical system defects, reasoning that because the panel has not caused any incidents, it is not technically 'defective.' The buyer closes on the property relying on the RECR. Six months later, an electrical fire causes significant damage. Which of the following most accurately describes Patricia's legal exposure under Wisconsin law?

Correct Answer

C) Patricia may face liability for intentional misrepresentation because she had actual knowledge of a known defect from a licensed professional's report and affirmatively checked 'No' on the RECR

Wisconsin Statutes § 709.02 requires sellers to disclose defects they actually know about. Patricia had actual knowledge of the electrical panel deficiency from a licensed electrician's assessment two years prior. By affirmatively checking 'No' for electrical defects on the RECR, Patricia made a knowing false statement on a legally required disclosure document. This constitutes intentional misrepresentation under Wisconsin law, exposing her to liability well beyond the cost of the panel, potentially including consequential damages from the fire. Her rationalization that no incident had yet occurred does not negate her actual knowledge of the deficiency.