Court reverses decision in home buyers' case against I-20 Team Real Estate over home's history of flooding

By Takesha Thomas | Feb 27, 2019

TYLER – An appeals court has reversed a trial court's ruling that dismissed a negligence claim filed by homeowners against a real estate company.

On Feb. 6, the 12th Court of Appeals at Tyler reversed the Smith County Court at Law's ruling that dismissed Michael and Shai Calhoun's negligence complaint against I-20 Team Real Estate LLC. The Calhouns filed an appeal arguing that the trial court erred by granting I-20 Team’s Rule 91a motion to dismiss. 

The matter was remanded back to the trial court. 

According to the ruling, the Calhouns retained a real estate agent from I-20 in 2015 upon relocating from Oklahoma to Tyler. The appellants allege that they saw a property listed by Rose Capital Realty in September 2015. The sellers' disclose notice for the property did indicate that there had been previous flooding inside the structure, however, the notice failed to provide the required explanation regarding the flooding. 

The Calhouns contend that they were not aware that an explanation regarding the flooding was required by law and the real estate agent for I-20 was required to provide an explanation "which would have informed them as to the source of the water that caused previous flooding into the structure," the ruling states.  

Justice Greg Neeley wrote in part that the Calhouns "had no reason to know that further explanation was legally required beyond simply checking 'yes' on the disclosure for 'previous flooding into the structures.' Appellants hired I-20 Team to represent and assist them in the purchase of their home, and I-20 Team could reasonably have anticipated that their failure to alert the appellants to the sellers’ failure to provide a complete explanation for the 'previous flooding into the structures' would result in the Calhoun's purchasing a home with an unknown and unanticipated defect that caused the previous flooding."

"Because Rose Capital did not provide complete information regarding past flooding, the appellants could not determine whether the previous flooding indicated on the disclosure was the result of water intrusion into the home from outside or from a condition within the home itself," Neeley wrote. "Because I-20 Team did not tell appellants that an explanation for the previous flooding was required, they made no further inquiry as to the source of the water before agreeing to purchase the home."

The Calhouns subsequently purchased the property, later learning that there had been water intrusion into the property for years due to inadequate drainage. They subsequently sued I-20 Team and Rose Capital over allegations of failure to disclose. However, I-20 moved to dismiss over allegations the appellants claims had no basis in law.

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