A recent decision from the Oklahoma Supreme Court has threatened the intent of the Residential Property Condition Disclosure Act and will allow buyers to seek punitive damages from sellers, prompting OAR to take immediate action.

On February 4 the Supreme Court considered a case in which a buyer sued a seller after experiencing flooding problems. The buyers sought rescission of the purchase contract, restoration of all monies paid by them, along with actual and punitive (exemplary) damages.

Although the RPCDA states that it is the sole and exclusive remedy with regard to residential property condition disclosures (which would exclude actual fraud/punitive damages), the Court ruled that “the language of the RPCDA cannot be interpreted to have been legislatively intended to supplant/abrogate a common law actual fraud claim based on alleged misrepresentations concerning material defects in residential real property made in connection with its sale, or the remedies associated with such a claim, including the potential of a punitive damage award.” Despite the fact that the RPCDA includes language indicating it is the “sole and exclusive remedy,” the Supreme Court said that five additional words are needed: “at common law or otherwise.”

OAR disagrees with the Court’s decision and argues that the RPCDA explicitly abrogates the common law (and therefore any potential actual fraud claims and punitive damages.) OAR is understandably very concerned with the Supreme Court decision and the potential liability it places upon sellers. “We believe the Court is disallowing protections sellers believed to be in place under the provisions of the RPCDA, which has been in effect for the past seven years,” said Lisa Yates, OAR chief executive officer. “The Court’s decision could affect everyone who has bought or sold a home during this seven-year period.”

OAR is already taking action to protect the legislative intent of the RPCDA. OAR has filed an application for permission to file an Amicus Curiae Brief (also known as a “friend of the court” brief) on behalf of the seller’s appeal to the case. This Brief will give OAR the opportunity to share our opinion with the Court, as well as share the original legislative intent of the RPCDA with the Court. This application was filed with the Supreme Court on February 25.

While awaiting the Court’s decision, OAR has also pursued a legislative remedy to add the five magic words (“at common law or otherwise”) suggested by the Supreme Court to the RPCDA. Since the Supreme Court’s decision was issued after the start of legislative session, OAR hadn’t reserved a bill to deal with the RPCDA. Fortunately, Rep. Sue Tibbs, R-Tulsa, had already filed a bill dealing with property disclosures, and she was more than willing to help OAR with the necessary language. Rep. Jari Askins, D-Duncan, offered the “five magic words” as a floor amendment on February 26, and the House unanimously passed on the amended bill to the Senate.

We’ll keep you posted as our efforts against the Supreme Court’s decision continue. In the meantime, if you have any questions, please contact Chief Executive Officer Lisa Yates or Director of Government & Public Affairs Charla Bruce at 405.848.9944 or 800.375.9944.