An Atlantic County lawsuit alleges a problem neighbor should be disclosed to a potential buyer just like mold and bad pipes must be revealed.
Cydnee Phoenix, 53, filed a four-count lawsuit last month alleging Lennar Homes withheld the harassing nature of the man who lived across the street of the Mays Landing home she bought.
"We contend that Lennar knew of and actively concealed information from Ms. Phoenix about her neighbor that would have prevented her from going ahead and purchasing the home," attorney Brett Datto said.
Kevin Potter allegedly had a history of harassment with Lennar, according to the lawsuit. But it's unclear what the legal obligation may have been, real estate lawyers said.
"It's definitely an interesting case," Atlantic City attorney Sarah Blumberg Weinstock said. "I've never seen anything like that in a standard contract of sale."
The case recently garnered national attention. Lennar has declined comment, citing their policy not to discus pending litigation.
"I just don't think that would be an appropriate thing to place on a builder as a discloser," said Brian Callaghan, an Atlantic City real estate attorney.
However, he pointed out that many consumer fraud lawsuits started out with the argument that "you didn't have a duty to do it, until a judge came in and said, 'Well, now you do have a duty.' The question is, 'How far will the court go in expanding it?'"
It's a difficult line.
"For a builder to start saying, 'Well, I really don't like this next door neighbor,' that gets into a slanderous type of thing," Callaghan said.
Datto agrees there's a line there, but alleges in this particular case the sales representative withheld information when Phoenix met Potter. The salesman allegedly said Potter was no longer eligible for certain services because of how long he had lived there, but instead it was due to "Potter's aggressive, harassing and hostile interactions with several of (Lennar's) agents, employees and/or workers," the suit claims.
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