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Does UTPCPL Apply to Real Estate Sales?

Posted By Cliff Tuttle | August 9, 2015

No. 1,197

BENNETT v. A.T. MASTERPIECE HOMES, 40 A.ed 145, 2012 Pa. Super. 60 (2012).

SCHWARTZ v. ROCKEY, 593 Pa. 536 (2007)

Image: sanantoniorealestate365.com

Image: sanantoniorealestate365.com

At the present time, it is firmly established in case law that the Unfair Trade Practices Consumer Protection Law, 73 P.S. § 201 et seq. may be applied in real estate transactions.  The case most often cited for this proposition is Gabriel v. O’Hara, 368 Pa. Super. 383, 534 A.2d 488 (1987).

In the 2012 case of Bennett v. A.T. Masterpiece, supra, the Superior Court affirmed an award of exemplary damages and attorneys fees to the purchasers of a new home from a custom builder.  During the course of construction, the purchasers walked through the construction site with the construction manager, who also owned the company, and pointed out various defects in the unfinished structure.  The construction manager/owner replied, on several occasions, “I’ll take care of that,” or similar statements.

Although the construction manager/owner argued at trial that these were vague “figures of speech”, signifying nothing, the court interpreted them to be warranties and imposed UTPCPL liability upon both the company and personally on the construction manager/owner.

While the application of UTPCPL to real estate transactions is well-established, a blog post by Robert j. Foster, an attorney with Reger Rizzo Darnell LLP, has suggested that the Supreme Court has signaled that it disagrees in a footnote in Schwartz v. Rockey, supra.

Note 15 states: “There is no issue presented in this limited appeal concerning Buyers’ standing to invoke this statute, since they are complaining of loss in connection with their purchase of real property, as opposed to the purchase of goods and services.”

Since the Seller did not raise this standing issue, the Supreme Court did not consider it.  And despite the invitation to do so, no one has argued it to the Supreme Court in the ensuing in the past eight years.  A. T. Masterpiece Homes could have done so, but didn’t. Of course, it would have had to raise it in post-trial motions, suffered defeat before the Superior Court, and raise it in a petition for allocatur.

The following is a statement of the argument A. T. Masterpiece Homes might have made to the Supreme Court.

UTPCPL grants authority to both the Attorney General and private litigants.  The authority of the private litigants is more narrow than that of the Attorney General and does not include the power to sue sellers of real estate.

Section 2-201-2(3), the Definition of Trade and Commerce, explicitly includes real estate transactions:

“‘Trade’ and ‘Commerce’ mean the advertising, offering for sale, sale or distribution of any services and any property, tangible or intangible, real, personal or mixed, and any other article, commodity, or thing of value wherever situate, and includes any trade or commerce directly or indirectly affecting the people of this Commonwealth.” [Emphasis supplied]

Section 2-201-2(4) goes on to enumerate 21 specific examples (in subsections i through xxi)  of “unfair methods of competition” and “unfair and deceptive acts or practices” addressed by the statute.

These two sections are then applied in Section 201-3, which enumerates unlawful acts and practices:

“Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce as defined by subclauses (i) through (xxi) of clause (4) of section 2 of this act [§ 201- 2(4) (i-xxi)] and regulations promulgated under section 3.1 of this act [§ 201-3.1] are hereby declared unlawful. . . .”

However, Section 201-9.2, Private Actions, does not include the right to sue under UTPCPL in real estate transactions:

“Any person who purchases or leases goods or services primarily for personal,family or household purposes and thereby suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment by any person of a method, act or practice declared unlawful by section 3 of this act [§ 201-3], may bring a private action, to recover actual damages or one hundred dollars ($100), whichever is greater.” [Emphasis supplied]

Thus, while the scope of statute as a whole includes real estate, it only authorizes purchasers of goods and services, not real estate, to bring a private action.  Presumably, the Attorney General could bring an action involving a real estate transaction, but not a private litigant. Or so the argument goes.

On the other hand, the Superior Court, when faces with a similar problem, construed another section of UTPCPL liberally to permit private litigation. In Cavalini v. Pet City, 848 A.2d 1002, the Superior Court recently held that the right of private action under the Dog Purchaser Protection provisions of UTPCPL had been intended by the legislature, despite language that delegated enforcement powers to the  Attorney General and did not mention a right of private action.

 “We find the legislature did not intend to create an inconsistency between the proviso;ns of 73 P.S.§§ 201-9.2 and 201-9.3 concerning the rights of consumers to pursue private actions under the UTPCPL. Thus, we find the trial court did not err in permitting a private cause of action pursuant to the Dog Provisions of the UTPCPL. Further, we find the exclusive enforcement powers given to the Office of the Attorney General in 73 P.S. § 201-9.3(h) are limited to the civil penalties outlined in 73 P.S. § 201-9.3(h)(2), similar to the remedy in the general provisions of the UTPCPL at 73 P.S. § 201-8.” 

CLT

Welcome

CLIFF TUTTLE has been a Pennsylvania lawyer for over 45 years and (inter alia) is a real estate litigator and legal writer. The posts in this blog are intended to provide general information about legal topics of interest to lawyers and consumers with a Pittsburgh and Western Pennsylvania focus. However, this information does not constitute legal advice and there is no lawyer-client relationship created when you read this blog. You are encouraged to leave comments but be aware that posted comments can be read by others. If you wish to contact me in privacy, please use the Contact Form located immediately below this message. I will reply promptly and in strict confidence.

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