Spring is almost here, and that means real estate sales in Wisconsin will soon be picking up! With that in mind, a recent Wisconsin Court of Appeals decision may have a large impact on future Wisconsin real estate transactions. In Fricano v. Bank of America, the Wisconsin Court of Appeals found that a buyer of a home had a valid fraudulent misrepresentation claim against a seller despite the fact that their purchase contract contained an “as-is” clause.

“As-is Clause”

“As-is” clauses are frequently used in real estate transactions to allow a seller to avoid liability coming from a buyer, usually when hidden defects are discovered after the sale closes. However, in Fricano, the sales contract also had a clause that stated the seller had “little to no direct knowledge about the condition of the property,” when in fact, the evidence showed that the seller had knowledge of a severe mold problem that had resulted from flooding of the home. The Wisconsin Court of Appeals found that where there is a deceptive affirmative representation, like the one the seller made in Fricano, an “as-is” clause cannot preclude the seller’s liability for fraudulent misrepresentation. Where there is evidence that a seller knew of a material adverse condition, it has a duty to disclose that to the potential buyer. The case is now being appealed to the Wisconsin Supreme Court.

This case demonstrates the importance of having well-drafted real estate documents and effective legal representation when you are buying or selling property. Whether you’re looking to buy or sell, consult an attorney at Schober Schober & Mitchell, S.C. to ensure your transaction goes smoothly.

This post is being submitted with the substantial research and writing help of Jeremy Klang, 3rd year senior at Marquette University Law School.