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Mahler v. Keenan Real Estate, Inc., 255 Kan. 593, 876 P.2d 609

Facts

The Mahlers purchased a house and 160 acres from the Hejnys, who lived nearby. During the sale process, the real estate agent, Charles Tammen, assured the Mahlers that there were no water problems in the area. After moving in, the Mahlers experienced health issues and discovered that the water quality was poor and the septic system was malfunctioning. They alleged that the Hejnys and Tammen made negligent and fraudulent misrepresentations about the property's condition.

The Mahlers bought from the Hejnys a house and 160 acres in Barton County, Kansas. When the Mahlers looked at the property, Donna and LaVonne Urban and their four children lived in the house.

Issue

Did the trial court err in concluding that Kansas does not recognize a cause of action for negligent or innocent misrepresentation by a real estate agent who induces a buyer to purchase real estate?

Rule

A purchaser who relies on a material misrepresentation or false statement, negligently made by a real estate broker to induce a sale, has a cause of action against the broker.

Analysis

The court examined whether the real estate agent, Tammen, had a duty to provide accurate information regarding the property's water and sewer conditions. It was determined that Tammen's statements could constitute negligent misrepresentation as he failed to exercise reasonable care in obtaining or communicating the information. The court also noted that the purchasers had a right to rely on the broker's representations.

The court examined whether the real estate agent, Tammen, had a duty to provide accurate information regarding the property's water and sewer conditions.

Conclusion

The Supreme Court affirmed in part and reversed in part, recognizing a cause of action for negligent misrepresentation against the real estate broker while upholding the dismissal of the fraudulent misrepresentation claims against the sellers.

Affirmed in part and reversed in part.

Who won?

The prevailing party was the Hejnys, as the court found no evidence of their knowledge of any misrepresentations regarding the property's condition.

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