This Maryland appellate decision clarifies which real estate agent owes a duty to disclose property defects to the buyer. The court held that only the buyer's broker has this obligation, absolving the seller's agent of liability for an undisclosed septic system failure discovered after settlement.

Maryland Appellate Court Affirms Summary Judgment for Real Estate Agents

and Companies in Property Fraud Case, Finding No Duty to Disclose Septic

System Defect and Upholding Contractual Fee Award

Court: Appellate Court of Maryland (Appeal from the Circuit Court, unreported

opinion)

Date: September 2, 2025 --- 2025 WL 2525713 (Circuit Court Judgment: February

1, 2022)

Introduction

In July 2017, Harrison Chaires entered a residential contract for a

Maryland property. The contract included an "AS IS" Addendum stating the

property was sold in "AS IS" condition, with the buyer entitled to

inspect at buyer's expense and to terminate within 15 days if

dissatisfied. The seller was represented by Bridget Scott of Innovative

Properties; the buyer was represented by David Wright of Champion

Realty. After settlement in 2019, Chaires discovered the septic system

had failed inspection. This case presents important questions about \(1\) whether defendants were precluded from seeking relief.

The Procedural Background

In July 2020, Chaires filed a complaint alleging concealment, deceit,

negligent misrepresentation, conspiracy to deceive, constructive fraud,

and breach of fiduciary duty against Champion Realty, Scott, Innovative

Properties, and others. In June 2021, Innovative and Scott filed a

motion to dismiss/motion for summary judgment. The circuit court granted

summary judgment on all counts in February 2022. The court subsequently

awarded \$49,827.50 in attorneys' fees. Chaires appealed both the

summary judgment and the fee award. The question before the appellate court was whether this order could be reviewed at that stage of the litigation.

The Legal Issue at Stake

\(1\) Whether defendants were precluded from seeking relief due to a

forfeited corporate charter; (2) whether the seller's agent (Scott) owed

a duty to disclose the septic system condition to the buyer; and (3)

whether the attorneys' fees award was proper.

Arguments Presented to the Court

Chaires (Appellant): Argued that Scott and Innovative Properties

owed him a duty to disclose the septic system defect, that the forfeited

corporate charter barred defendants from relief, and that the fee award

was improper.

Defendants (Appellees): Argued that only the buyer's own broker owed

a duty to disclose under Maryland law, that a forfeited corporation may

still participate in litigation to resolve liabilities, and that the

contract entitled them to fees as prevailing parties.

The Court's Holding

Affirmed in all respects.

Detailed Analysis and Reasoning

The court held: (1) Under Md. Code Ann. § 3-515(c), a forfeited

corporation continues existing for limited purposes and can participate

in litigation. (2) Under Md. Real Property § 10-702(m), only the buyer's

broker owes a disclosure duty regarding property defects; Scott was the

seller's agent and owed no such duty to the buyer. All remaining

claims---fraudulent concealment, constructive fraud, breach of fiduciary

duty---required a predicate duty that did not exist between Scott and

the buyer. (3) Contract Paragraph 36 provided indemnification including

fees for any action based on contract performance; defendants were

entitled to fees as prevailing parties.

This reasoning demonstrates the court's careful application of precedent to distinguish between different legal doctrines. The analysis provides clarity on how courts should interpret similar statutes and apply appellate procedure rules.

Practical Significance for Legal Practitioners

This decision is important for practitioners because it clarifies the court held: (1) under md. Understanding the court's reasoning helps attorneys avoid procedural pitfalls and develop effective litigation strategies.

Key practice points include:

• The importance of carefully analyzing the specific language and scope of statutory provisions
• How appellate jurisdiction depends on the type of legal protection or immunity being asserted
• The procedural consequences of mischaracterizing the nature of a defense

Practitioners should carefully consider how this holding applies to their own cases and adjust their litigation approaches accordingly.

This case summary is provided for informational and educational purposes only. It should not be construed as legal advice. Practitioners should consult with qualified legal counsel regarding their specific situations.

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