The buyer and seller entered into the Arizona Association of REALTORS® Vacant Land/Lot Purchase Contact. The seller believed the lot contained 10.7 acres and advised the buyer accordingly. The buyer did not conduct a survey before closing. After the closing, the buyer surveyed the lot and discovered that the lot was actually 9.2 acres. The buyer is demanding that the seller compensate him for the difference in value between the size of the lot as represented and as existing.
Is the seller legally responsible to reimburse the buyer?
The Vacant Land/Lot Purchase Contract provides at Section 6b in all bold and capital letters:
Square footage/acreage: Buyer is aware that any reference of square footage/acreage of the property, both the real property (land) and improvements thereon is approximate. If square footage is a material matter to the buyer, it must be investigated during the due diligence period.
Thus, pursuant to the terms of the Contract, the buyer was obligated to investigate the size of the lot if it was material to him. The Court of Appeals in Elm Retirement Center v. Callaway, 226 Ariz. 287, 246 P.3d 938 (Ariz. Ct. App. 2010) confirmed the enforceability of this risk shifting concept. There, the Court enforced the language regarding the size of the home at issue and held that the seller had no liability.