SB 9

In

Below v. Norton

, 2008 WI 77, 751 N.W. 2d 351, the Wisconsin Supreme Court

determined that the economic loss doctrine bars a homebuyer from recovering in tort

for an intentional misrepresentation concerning the property made by the seller of

the property. Under the judicially created economic loss doctrine, a purchaser of a

product that is defective may not recover from the seller on a tort theory, such as an

action for damages for fraud or intentional misrepresentation, for damages that are

solely economic; the recovery is limited to damages for a breach of contract. Before

Below

, with respect to real estate sales, the economic loss doctrine applied only to

commercial transactions.

This bill reverses the decision in

Below

by providing that, in addition to any

other remedies that are available, a transferee (purchaser) in a residential real

estate transaction may maintain an action in tort against the transferor (seller) of

the real estate for fraud committed, or an intentional misrepresentation made, by the

transferor in the residential real estate transaction. The bill defines a residential

real estate transaction as a real estate transfer for which a real estate condition

report is required, which is, generally, a transfer of previously inhabited real

property.