Appeal from the Iowa District Court for Polk County, Robert B. Hanson, Judge.
The opinion of the court was delivered by: Vaitheswaran, P.J.
Home sellers appeal a district court order finding them statutorily liable for failure to disclose a leaking roof and damaged windows when they listed their home for sale. AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
Heard by Vaitheswaran, P.J., and Tabor and Mullins, JJ.
Joseph Emans and Lisa Swesey appeal a district court order finding them statutorily liable for failure to disclose a leaking roof and damaged windows when they listed their home for sale.
I. Background Facts and Proceedings
Emans and Swesey purchased a home in West Des Moines. In 2006, Emans noticed a leak in the sunroom. He repaired the leak and experienced no further problems.
In 2009, Emans and Swesey listed the home for sale. They completed a seller disclosure form in connection with the listing.
The form included a list of questions under the heading "Property Conditions, Improvements and Additional Information." One of the questions was "Roof: Any known problems?" The sellers answered, "new 2006 approx." Another question sought the "[d]ate of repairs/replacement." The sellers did not disclose the leak in the sunroom or the repair of that leak.
The form also included a list of questions and check-box answers under the heading, "Appliances/Systems/Services." This portion of the form was designated "not mandatory" and only "for the convenience of Buyer/Seller." Among the questions was a request for information about the condition of the windows. The sellers checked the box indicating that the windows were "[w]orking."
After the home was listed, Jill Stuecker and Kwasi Yeboah viewed it and made an offer to purchase it. The offer was accepted, but was subject to the sale of the buyers' home and a buyers' home inspection. The buyers obtained an inspection, which disclosed that the windows were not opened due to weather conditions. The report disclosed no leaks in the sunroom.*fn1
Six to eight weeks after closing, the buyers noticed wetness in the northeast corner of the sunroom and wetness in the drywall on the ceiling. Yeboah tore off a deck above the sunroom and found that one wall was soft. The buyers hired contractors to repair the damage. The total cost was $17,280.92.
The buyers also found that four of the windows in the home would not open. They obtained a replacement cost estimate of $4365.
The buyers sued the sellers for fraud by concealment, fraud by false disclosure statement, misrepresentation, negligence, and statutory liability under Iowa Code chapter 558A (2011). The sellers answered and counterclaimed for attorney fees. Following trial, the district court dismissed all the claims except the statutory liability claim. On that claim, the court found the sellers "had actual knowledge of the existence of a problem involving a leak in the roof of the sunroom" and failed to disclose the leak in their disclosure statement. The court also found that the sellers "failed to exercise ordinary care to obtain ...