Guest Blogger ANDREA J. LAWRENCE is a Senior Counsel at Epstein Becker & Green in New York. She provides legal advice and counsel to clients in the real estate industry. Andrea has extensive commercial litigation experience, and has provided legal representation to real estate companies, landlords, developers, property management companies, and commercial tenants She recently published an article about bed bug litigation in the New York Real Estate Journal. Despite some recent highly publicized bedbug personal injury litigation involving prominent New York hotels, Andrea concludes on the basis of a recent New York appellate case, that bedbug cases may not fare well in a commercial setting.
Many people don't necessarily associate bedbugs with other environmentally hazardous conditions such as toxic mold or oil contamination. However, the reemergence of bedbugs in this country has created unsafe and hazardous living conditions, and has spawned a recent spate of lawsuits throughout the United States. Just recently in New York, the Appellate Division, First Department, shed some light on the issue of liability in the sale of an apartment building with an alleged bedbug infestation. In 85-87 Pitt St., LLC v 85-87 Pitt St. Realty Corp., 83 A.D.2d 446, 921 N.Y.S.2d 40 (1st Dep't 2011), the appellate court upheld a lower court dismissal of a lawsuit, where a buyer sought damages from a seller after its purchase of a residential apartment building with a prior bedbug infestation. The Appellate Division affirmed the lower court's dismissal of the case, predicated upon the contract clause setting forth that the buyer had accepted the building "as is" after having had an opportunity for inspection, as well as the merger clause contained therein that extinguished any claims arising from the seller's alleged misrepresentations concerning bedbugs. Thus, at least in this jurisdiction, there is not much legal recourse for purchasers of buildings, or even apartment units, with a bedbug history, where such relief is precluded by contract.
The lesson to be learned from this case is simple – in the course of a buyer’s due diligence in today’s market, it should search building records for reports of a bed bug (or any insect/vermin) infestation, and may want to conduct its own physical inspection with an exterminator to uncover any such infestation, past or present. Moreover, should a buyer wish to have some safeguard against this issue, it should insist on a clause within the contract of sale whereby the seller proffers a representation about the presence or absence of bedbugs so as to be enforceable.