Caveat Emptor and Publicly Available Information Doom Real Property Fraud Claims

A recent decision of the New York Appellate Division, Second Department, addressed claims of fraud in the context of the sale of real property, and specifically the interrelationship between the buyer’s duty of due diligence and the seller’s duty to refrain from “concealing” material information concerning the real property—Lin Chen v Zum Dev., Inc., 2026 NY Slip Op 01937 (2d Dep’t Decided April 1, 2026)(“Zum”).

Caveat Emptor

The doctrine of “caveat emptor” plays a critical role in any fraud-related claim relating to the sale of real property. I have commented often on this doctrine and how it can significantly limit the ability of the buyer to establish a viable claim of fraud or misrepresentation relating to real property sales. See, e.g., Caveat Emptor Bars Fraud Claim in Real Property Sale. While any claim of fraud requires as a necessary element that the party alleging it has been misled to establish that it acted reasonably in relying on any alleged false information, in the context of the sale of real property, the concept of “let the buyer beware” (which is the literal translation of caveat emptor) has heightened importance.

In any fraud claim, even if not in the context of a real property transaction, the fraud claimant has a duty to use available means, including through publicly available information, to vet anything upon which it will rely to take any form of action. See Third Department Finds Reliance Justified Even When Information Allegedly Concealed Was Publicly Available.

These concepts surfaced as the dispositive factors in the recent Zum case.

Read the full blog post here.