If Your Client’s Home Turns into a Nightmare, Think of St. Thomas Aquinas (Article and Video)
The following blog post was originally posted on The Real Estate Bar Association for Massachusetts (REBA) blog. Read the original post here.
Even in the midst of a global pandemic, the sale of new and renovated homes has continued apace. According to the United States Department of Commerce, more than 620,000 homes will be bought and sold in the United States this year alone. But, what happens when your client’s dream home is littered with defects and turns into a nightmare? A good place to start is the teachings of St. Thomas Aquinas.
In the 13th century, St. Thomas Aquinas, an influential philosopher and religious leader, outlined the following four principles in the context of product sales:
1. A defect in kind, in quantity, or in quality, if known to the vendor and unrevealed, is sin and fraud, and the sale is void.
2. If the defect be unknown it is no sin. Yet the seller must make good to the buyer his loss.
3. A seller is bound to reveal secret flaws that may occasion loss through a decrease in the value of the article or danger through the ware becoming harmful in use.
4. If the flaw is manifest, he is not bound to reveal it “by any duty of justice,” though to do so would exhibit “the more exuberant virtue.”
Aquinas, Summa Theologica (2d ed. 1896)
These moral principles were widely accepted throughout Europe and enforced in various civil justice systems – namely in England – for several hundred years.
With the emergence of the Reformation in the 16th and 17th centuries, civil society began to shift away from moral and religious governance to a more laissez faire attitude in commerce and trade. From that attitudinal shift arose the doctrine of caveat emptor: Let the Buyer Beware. Caveat emptor placed the onus in a transaction upon the buyer, as opposed to the seller, absent an express warranty or fraud. See Chandelor v. Lopus, 79 Eng. Rep. 3 (1603).
However, caveat emptor fell out of favor almost as quickly as it rose. Tracking the industrial revolution and increased complexity in commercial life, courts began to question the wisdom of caveat emptor and created and imposed implied warranties of merchantability and habitability in certain types of transactions. Legislatures also followed suit by setting new statutory rules to protect consumers including home buyers.
In Massachusetts, the Supreme Judicial Court established an implied warranty of habitability in the landlord-tenant context in Boston Housing Authority v. Hemingway, 363 Mass. 184 (1973) and extended the principle to residential real estate sales in Albrecht v. Clifford, 436 Mass. 706 (2002). Similarly, the Massachusetts legislature enacted Mass. Gen. Laws ch. 93A (“Chapter 93A”) to level the playing field in consumer sales and to place affirmative duties of disclosure upon sellers in transactions involving “trade or commerce.” See 940 C.M.R. § 3.16.
As a result of these and other legal developments, the following currently constitutes the most critical aspects of Massachusetts law in the home sales context:
1. Fraud remains impermissible, see Kannavos v. Annino, 356 Mass. 42 (1969);
2. Implied warranties, where applicable, trigger liability for latent defects, see Albrecht, 436 Mass. 706;
3. Chapter 93A requires disclosure of defects in “trade or commerce”, see Rousseau v. Gelinas, 24 Mass. App. Ct. 154 (1987); and
4. Exculpatory provisions, like “as is” provisions, generally protect sellers from liability for obvious defects, see generally McEvoy Travel Bureau, Inc. v. Norton Co., 408 Mass. 704, 712 (1990).
Therefore, the principles laid down by St. Thomas Aquinas nearly 800 years ago – while on a hiatus during the caveat emptor period – have gained widespread acceptance once again and more or less represent the current state of Massachusetts law. So, if your client’s dream home turns into a nightmare, considering St. Thomas Aquinas’ teachings is a great place to start your analysis.
This blog was adapted from a webinar titled “When your Client’s Dream Home Turns into a Nightmare” available here: https://rebama.blogspot.com/2020/07/if-your-clients-home-turns-into_1.html