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Donald and Danielle Provenzale ("Buyers") entered into an agreement to purchase the home of Harold and Ruth Forister ("Sellers"), and the Buyers deposited $5,000 in earnest money with the Sellers. The Sellers gave the Buyers an executed property condition disclosure form. The form had been completed at the time the Sellers had offered their home for sale. On the form, the Sellers indicated that they were not aware that their property was located in a flood plain. The transaction did not close, and the Buyers brought suit against the Sellers, alleging that they failed to disclose that the property was located in a flood plain. The trial court dismissed the complaint. The Buyers appealed.
The Appellate Court of Illinois, Second District, partially reversed the trial court's rulings. The court first considered the dismissal of the Buyers' allegations for breach of the Illinois Residential Property Act ("Act"). The trial court had ruled in the Sellers' favor because the trial court interpreted the Act as requiring a "transfer" of property, which did not happen here since the sale never closed.
The appellate court noted that this was the first time an Illinois court had faced this issue. The court ruled that a transfer was not required under the Act. It found that the purpose of the Act is to provide prospective buyers with information about material defects known by the seller. To accomplish this goal, the court ruled that the disclosure duties arise when a potential transfer is contemplated by a buyer and seller. If the Act required a transfer, that would make all of the disclosure duties prior to transfer "meaningless." Therefore, the court ruled that the Buyers could bring a lawsuit against the Sellers under the Act even though the sale did not close, and so reversed the trial court.
Next, the court considered the dismissal by the trial court of the Buyers' allegations for violations of the Consumer Fraud Act. In Illinois, courts have held that an individual who sells his/her single-family home can not be liable under the Consumer Fraud Act. Therefore, the court affirmed the trial court's dismissal of these allegations.
Provenzale v. Forister, 318 Ill. App. 3d 869, 743 N.E.2d 676 (Ill. App. Ct. 2001).