Misstating Location Matters

New Jersey Superior Court, Appellate Div. Vagias v. Woodmont Properties LLC, 2006

August 1, 2006

A New Jersey appeals court has decided that a salesperson’s misstatement about the area in which a property was located could be a misrepresentation under the state’s consumer protection statute. In the case, Theodore and Frances Vagias wanted to buy a home in the Montville section of Montville Township. They preferred this section over the other two in the township because they wanted to send their son to a particular school.

The buyers and the salesperson representing them met with a builder, who assured them that a new development was located in the Montville area. The salesperson concurred. After the closing, the buyers learned that their home was located in Towaco, another section of Montville Township, which meant their son wouldn’t be able to go to the school they preferred. The Vagiases filed a suit under the New Jersey Consumer Fraud Act against the salesperson and the broker alleging that the salesperson had been either mistaken or misled by the builder.

The trial court ruled for the salesperson, but the appeals court reversed the ruling and sent the case back to the trial court. The trial court had determined that since the salesperson stated the home was in Montville, not Montville Township, her concealment was only an act of omission, and there was no evidence she intended to mislead the buyers.

The appellate court disagreed, stating that the salesperson could have made an actual misrepresentation. If so, the plaintiff didn’t have to prove an intent to deceive to prosecute. The appeals court also noted that since the salesperson received a commission on the transaction, she wasn’t an innocent bystander but had an interest in seeing the transaction go forward.