The Hawai'i Intermediate Court of Appeals recently handed down its decision on a case representing any hopeful Hawaiian buyers' nightmare.
The plaintiffs entered into a sales agreement in order to purchase an undeveloped 4 acre estate boasting a view of nearby waterfalls and Pukihae Stream, which they planned to redevelop. The initial sales contract was executed with $25,000 earnest money, and contained both an as-is condition which mentioned frogs on the property, and an additional "frog pest alert," which apparently the buyers did not read.
It wasn't until one of the buyers visited the property at night that he, "realized how loud" the coqui frogs were. He at that time apparently also learned that the area near the property was "populated by drug dealers and hookers."
"Instead of being in an area 'where one could hear the flow of water falls and a stream ... all one could hear is the sound of dying and tortured animals (which is the sound of the frogs occupying the area) and [the property] was in a neighborhood where drug dealers and prostitutes frequented,'" he stated in the amended complaint, suing for misrepresentation.
(Unilateral misrepresentation, which would be the buyers' argument here, where one party is mistaken or misled about an essential term of a contract, is actionable only when the other party has done something to conceal or otherwise purposely mislead that party. For example, if the seller had not disclosed the frogs, or had lied about the presence of any pests, etc., the outcome of the decision would most likely be different.)
The court reproduced the U.S. Department of Agriculture's Animal and Plant Health Inspection Service Pest Alert, which was included with the original contract, in a footnote, and it states in pertinent part that, "[t]he noise from a group of frogs can exceed 70 decibels, rivaling the sound of a lawnmower or chainsaw."
Additionally, the court held, "[w]e find nothing in Hawaii statute or case law to support [buyers'] contention that defendants had a duty to inspect and/or disclose facts about transient social conditions in the neighborhood." The court's decision relied on a case that stated the seller only had duties regarding things that were "rooted in the land," i.e. permanent.
While I believe the court was completely justified in its decision, it's almost a comical case. When someone buys a sprawling Hawaiian estate that they are planning to redevelop, I'm sure they would never expect for the property to have multiple kinds of pests which might render the land worthless for the intended purpose, if not well below the almost $2,000,000 purchase price. This is certainly another illustration of the prudent advice: caveat emptor.
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