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Seller Beware: Insureds Not Covered for Misrepresentations in the Transfer of Real Estate

The situation is not uncommon: A buyer purchases a residence or piece of land, discovers material defects, and files suit against the seller based on fraud and negligent misrepresentation, seeking the cost of repairing the defective condition or rescission of the purchase agreement. Judging by the growing body of case law, the seller then tenders the suit to its liability insurer, typically under a homeowners or general liability policy.

31 minute read June 01, 2004 at 11:29 AM
By
William P. Shelley and Joseph A. Arnold
Seller Beware: Insureds Not Covered for Misrepresentations in the Transfer of Real Estate

The situation is not uncommon: A buyer purchases a residence or piece of land, discovers material defects, and files suit against the seller based on fraud and negligent misrepresentation, seeking the cost of repairing the defective condition or rescission of the purchase agreement.

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