Trial Court Decision Affecting Property Disclosure Document Reversed
LOUISIANA REALTORS • January 25, 2019
By: Patricia B. McMurray, JD
Baker, Donelson, Bearman, Caldwell & Berkowitz, PC
450 Laurel Street, Chase Tower North, 20th Floor
Baton Rouge, Louisiana 70801
Background
In Valobra v. Nelson, the buyer sued the seller alleging the seller misrepresented the condition of the property by checking the "no" box on the Property Disclosure Document ("PDD") instead of the "no knowledge" box as to questions regarding the condition of the property.[1] The buyers allege because of this misrepresentation by the sellers on the PDD, the buyers agreed to buy the property "as is" and waive redhibition rights in the Act of Sale. Redhibition is a warranty required by state law to be given to a buyer unless waived by the buyer. Redhibition means the buyer can sue to return the property to the seller or get a refund of a portion of the purchase price after the sale if the buyer discovers a defect in the property that if the buyer had known about prior to the sale he would not have bought the property.[2] The Valobra buyers alleged that the sellers checked the box marked "no" in response to questions on the PDD regarding whether the property had certain defects. Defects in the property were later discovered. The sellers then claimed they did not know of the defects in the property.[3] The buyers argued that the sellers checking the box marked "no" instead of the box marked "no knowledge" on the PDD and therefore intentionally misled the buyers into believing that the sellers had knowledge that there were no defects in the property. The buyers alleged the sellers were in bad faith and fraudulently induced the sellers to execute a waiver of redhibition contained in the Act of Sale by stating "no" instead of "no knowledge" of the defects.[4]
24th Judicial District Court
The trial court, the 24th Judicial District Court denied the motion for summary judgment filed by the Seller on March 25, 2018. The Seller alleged in the motion that there appears to be no controversy over whether the Buyer was aware of the alleged "defects" at the time of execution of the waiver of redhibition included in the Act of Sale as the Seller and Buyer had agreed to a price concession to compensate the Buyer for the "defects" noted by the home inspection prior to sale. The Seller filed a Writ to the Court of Appeal requesting the Court of Appeal revise the trial court's denial of the motion for summary judgment.
Louisiana REALTORS® filed an amicus brief in support of the Seller's Writ. The Court of Appeal held that the
"Plaintiff's (Buyers) argument failed to recognize that the Property Disclosure required by the RPDA (property disclosure form) does not provide a guaranty that no defects exist in the property, but rather requires disclosures of known defects to the best of the seller's information, knowledge or belief. La. R.S. 9:3198(D) specifically states a property disclosure document is not a warranty and is not part of any contract between the buyer and seller. In addition, buyers, such as plaintiffs, cannot rely on the property disclosure document as a substitution for inspections. Therefore, plaintiffs cannot use their alleged reliance on the Property Disclosure as an excuse for failing to obtain a comprehensive home inspection or failing to follow the advice of the inspectors to obtain more extensive inspections." (explanation supplied)
The Writ was granted by the Court of Appeal and the reversal of the denial of the motion for summary judgment was granted. All claims against the Seller by the Buyers were dismissed. A full copy of the Court of Appeal's Judgment can be found here.
Louisiana Supreme Court
The Buyers filed an Application for Writ of Certiorari with the Louisiana Supreme Court on January 16, 2019 requesting a review of the Fifth Circuit Court of Appeal Judgment. We will provide information on the outcome of the appeal to the Louisiana Supreme Court when available.
[1] Nancy Williams wife of/and Franco Valobra vs. Robert Allan Nelson and Jerome Garfield Smith, III as Co-Trustees of the Allan R. & Louise S. Nelson Revocable Trust & The Allan R. Nelson Marital Trust, Suit No. 720-048, 24th Judicial District Court for Jefferson Parish
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[2] La. Civil Code 2520
[3] Id.
[4] Id.
The National Association of REALTORS® Board of Directors approved a 2026 budget with no dues increase and passed a Professional Standards Recommendation to clarify language in NAR Code of Ethics Standard of Practice 10-5, which prohibits harassment of any person or persons protected under Article 10 of the Code. A day earlier, the Executive Committee approved another Professional Standards change, revising language for Policy Statement 29 designed to ensure state and local associations can fairly and consistently enforce the Code of Ethics. Learn more about the changes. Read the revised Code of Ethics and Standards of Practice. Board members also approved a consent agenda to elect the 2026 officers and regional vice presidents . Christine Hansen of Ft. Lauderdale, Fla., was elected 2026 President-Elect, and Colin Mullane of Ashland, Ore. was elected 2026 First Vice President. The meeting opened with a video message from President Donald Trump, who welcomed REALTORS® to Washington and thanked them for support of the House-passed tax reform. NAR routinely invites the U.S. president to address REALTORS® at the Washington meetings. Over NAR's history, nine sitting presidents have addressed the association. Board Actions Approved a series of Finance Committee recommendations, accepting the association’s financial statement, approving the 2026 operating and advocacy budgets, and keeping dues at $156. The board actions also redirect $35 of the $45 Consumer Advertising Campaign assessment to operating funds. This change positions NAR to make its next settlement payment in February 2026 and maintain a balanced budget without raising total dues. The remaining $10 for the Consumer Advertising Campaign will fund optimized, metrics-driven activities that reach and engage consumers in critical markets. NAR CEO Nykia Wright and President Kevin Sears explained the shift at the opening session of the conference . Amended Standard of Practice 10-5 to give state and local associations greater clarity in how to fairly and consistently enforce Article 10 of the Code of Ethics. The amended Standard of Practice says that REALTORS®, in their capacity as real estate professionals, in association with their real estate businesses, or in their real estate-related activities, shall not harass any person or persons based on race, color, religion, sex, disability, familial status, national origin, sexual orientation, or gender identity. Made a series of recommendations to the Standards of Practice to bring the language in line with the terms of NAR’s 2024 settlement. Approved a motion to make one member of the Executive Committee a commercial practitioner who has served as chair, vice chair or liaison of an NAR commercial-related committee or forum to serve a two-year term and be independent of the 10% commercial representation requirement outlined in the NAR Constitution. Approved a recommendation from the Credentials and Campaign Rules Committee to amend qualifications for president-elect, first vice president and treasurer effective Jan. 1, 2026. Qualifications for top-line officers are now aligned with those already in place for regional vice presidents. Approved recommendations from the Member Accountability Committee related to applications for volunteer leadership and the Statement of Appropriate Event Conduct. The goal of the recommendations is to ensure members found in violation of the NAR Member Code of Conduct are properly disclosed. Award Winners NAR President Kevin Sears announced the 2025 Distinguished Service Award winners James P. Cormier , AHWD, C2EX, of Minneapolis-St. Paul, and Brooke S. Hunt , AHWD, E-PRO, SFR, SRS, C2EX , of Flower Mound, Texas. In addition, the group recognized the winner of the 2024 William R. Magel Award, Anne Marie DeCatsye , CEO of the Canopy REALTOR® Association and Canopy MLS in the Charlotte, N.C., metro area. REALTORS® Relief Foundation During the meeting, REALTORS® Relief Foundation President Greg Hrabcak appealed to board members to make a tax-deductible donation. The fund provides housing assistance to victims in the immediate aftermath of a disaster; 100% of funds donated go to disaster relief. “We’ve had devastating wildfires in California, tornadoes in Missouri and Kentucky and flooding in West Virginia, and we’re still in the first half of this year,” Hrabcak said. Before the meeting ended, directors had donated more than $41,000.
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