COA agrees sellers must pay $280,000 in damages for ‘downright dangerous’ home

A couple who sold a house they built themselves that contained numerous structural issues is on the hook for $280,000 to the buyers of the home. The Court of Appeals found that the sellers made misrepresentations on their real estate sales disclosure form.

This is the second time the appellate court has ruled on this lawsuit, David T. Hays and Amanda G. Hays v. Deborah J. Wise, 76A04-1401-PL-43. The first time, the COA reversed the dismissal of Deborah Wise’s lawsuit alleging David and Amanda Hays failed to disclose defective conditions in the home she purchased from them in 2007.

When Wise and her husband purchased the home, the Hayses had completed the sales disclosure form saying they knew of no structural problems with the home, did not make any substantial changes requiring permits and did not receive any notices from governmental or quasi-governmental entities regarding the property.

But the Hayses never obtained the proper permits for the home which David Hays built with four friends. The couple also had worked with the Army Corps of Engineers to address a dredging issue. Although Wise had an inspection completed before purchasing, it did not turn up the numerous issues discovered after moving in. Several inspectors believed the home was nearing collapse and was dangerous. Walls moved, floors could not support weight, and the foundation was not built deep enough.

On remand, the trial court ruled in favor of Wise, ordering the Hayses to pay $281,062.77 in damages, which included attorney fees.

The Hayses don’t deny the home has significant issues, but they claim the evidence doesn’t show that they had actual knowledge of those issues. They also argue against the damages award, saying it exceeds the cost necessary to repair the structural defects the court found the Hayses knew of when selling. The inspectors who looked at the home indicated it needs to be torn down and rebuilt because it would cost too much to attempt to repair.

The judges found that while there was no direct evidence that the Hayses had actual knowledge of the defects, based on the facts and circumstances of the case there was sufficient circumstantial evidence for the trial court to infer that the Hayses had actual knowledge of most, if not all, of the home’s defects or problems beyond just the structural ones. Judge James Kirsch pointed to the interactions with the Army Corps of Engineers, that the Hayses knew the home had to be permitted but “forgot” to do so, and that the couple added additional bedrooms and the building permit required the removal of a mobile home trailer frame, but it was instead used as structural report.