John Brokaw was interested in purchasing an apartment building. He was, however, very concerned about the price.

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John Brokaw was interested in purchasing an apartment building. He was, however, very concerned about the price. Since he did not trust the revenue figures that the vendor had provided, he hired Lonnie Hauser, a property value appraiser. Brokaw explained in great detail that he needed to know, as precisely as possible, how much the apartments would generate in rent. Hauser's final report indicated that the building was worth $1 400 000. Brokaw accepted that information and purchased the property at that price. He soon discovered, however, that the building was actually worth considerably less. The tenants were all on social assistance. The basic rent that the government was willing to pay was set at $325 per month, and each apartment contained two tenants. Hauser therefore had simply assumed that each apartment would produce $650 per month. In fact, however, whenever the two tenants were related, then the government set the rent at $520 per month. A number of apartments were occupied by married couples. As a result, the actual value of the property was $1 000 000. Hauser nevertheless says that he should not be held responsible because he had reasonably assumed that the same rent would apply to every apartment. Will Brokaw be successful if he sues Hauser in negligence? Explain your answer.

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Related Book For  answer-question

Managing the Law The Legal Aspects of Doing Business

ISBN: 978-0133847154

5th edition

Authors: Mitchell McInnes, Ian R. Kerr, J. Anthony VanDuzer

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