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Professional Liability

Defense Digest

Offensive, But Not Actionable: The Limits of Pennsylvania’s Real Estate Seller Disclosure Law

Defense Digest, Vol. 32, No. 1, March 2026

March 1, 2026

by James D. Greco

Key Points:

  • Objectively-quantifiable flaw is needed in order to assert a claim for violation of the RESDL.
  • Nazi floor design did not constitute a physical or structural problem with the property.
  • Subjectivity cannot drive RESDL claims.

As is well known among real estate agents and brokers, Pennsylvania’s Real Estate Seller Disclosure Law, 68 Pa.C.S. §§ 7301, et seq., places responsibility on sellers to disclose material defects with respect to their property during a real estate sale. Specifically, the RESDL states:

  • Any seller who intends to transfer any interest in real property shall disclose to the buyer any material defects with the property known to the seller by completing all applicable items in a property disclosure statement which satisfies the requirements of [§] 7304 (relating to disclosure form). A signed and dated copy of the property disclosure statement shall be delivered to the buyer in accordance with [§] 7305 (relating to delivery of disclosure form) prior to the signing of an agreement of transfer by the seller and buyer with respect to the property.

68 Pa.C.S. § 7303. Liability under the RESDL is extended to agents of the seller where they have actual knowledge of such defect.

While plaintiffs have attempted to expand the reach of the RESDL to more subjective claims, courts throughout the Commonwealth have historically limited permissible claims. Claims are restricted to those regarding defects that substantively impact the value of the real estate, while still being capable of recognition and quantification by objective standards.

The foregoing limitation was recently analyzed in Wentworth v. Steinmetz, 2025 WL 3157571 (Pa. Super. Nov. 12, 2025), which analyzed whether a symbol tiled into a floor of a home constituted a “material defect.” Wentworth involved a dispute between the buyers and seller of a residence in Beaver County, Pennsylvania. After closing, the buyers found the basement floor to be tiled with a swastika and what they believed to be a Nazi eagle. This area of the floor had been covered by a rug when they initially viewed the home, thus, the buyers were not aware of it until after the closing. The buyers claimed they could not be expected to live in a home with such condition and asserted that it would cost $30,000.00 to replace the floor, arguing that the seller was liable for compensatory and punitive damages for failing to disclose the condition. The trial court found for the seller, determining that the symbols did not constitute a material defect, which the buyers appealed.

The Superior Court looked to Milliken v. Jacono, 103 A.3d 806 (Pa. 2014), as modified on reconsideration (Nov. 12, 2014) (Milliken II), where the Pennsylvania Supreme Court held that purely psychological stigmas are not material defects of property that sellers must disclose. Milliken II involved a claim for violation of the RESDL for the sellers’ failure to disclose a murder-suicide that took place in the residence. If such a duty was to be created, the Milliken II court opined, it should be imposed by the legislature.

Applying the analysis set forth in Milliken II, the Superior Court reiterated that an objectively-quantifiable flaw is needed in order to assert a claim for violation of the RESDL, agreeing with the trial court’s position that the floor design did not constitute a physical or structural problem with the property. The court further reiterated that this objective standard is necessary in order to not only apply the law with consistency, but also to limit the burden placed on sellers. Since the floor in question was sound and functional, the presence of the symbols, no matter how abhorrent, did not constitute a material defect.

While not involving real estate agents, Wentworth is instructive of how Pennsylvania’s courts analyze the wide variety of claims under the RESDL, and the fact that the court appears disinclined to permit subjectivity to drive such claims. Thus, sellers and agents alike can take solace in the fact that claims based on how a party feels about a feature or fixture of a property, without any physical or structural issue, does not pass muster when it comes to the RESDL. Certainly, this is helpful to real estate agents and brokers who are not only bound by the RESDL where they have actual knowledge of an alleged defect, but also owe a duty to their clients to represent them in a professional manner during the sale of the real estate, including advising sellers as to the information that needs to be disclosed.

Indeed, the RESDL does encompass a broad set of areas with respect to the necessary disclosures. However, the courts’ analyses in Milliken II and, more recently, Wentworth, limit the subjective nature of such claims, placing the onus on the legislature if there is to be any expansion with respect to the same.

James works in our Scranton, PA office. He can be reached at (570) 496-4662 or JDGreco@mdwcg.com.

Firm Highlights

Thought Leadership

Florida Supreme Court Rules Florida Statute §627.70152 Does not Apply Retroactively

In a decision that resolves years of appellate uncertainty and confirms that insurers and insureds alike can rely on the legal framework in place when a policy is issued, the Supreme Court of Florida last week found that Florida Statute §627.70152, which involves an insured’s requirement to provide an insurer with pre-suit notice before filing a suit, cannot be applied retroactively. In Universal Property & Casualty Insurance Company v. Hughes, the Court was presented with the issue of whether the statutory pre-suit notice requirement applied retroactively and whether it would apply to a breach of contract of an insurance policy that was issued before the statute went into effect. Before the Court was an appeal from a homeowner, Ms. Hughes, who sued her insurance carrier, Universal Property & Casualty Insurance Company (Universal) for breach of contract under an insurance policy that was in effect from April 24, 2019 through April 24, 2020. During the policy period, Ms. Hughes suffered a loss and, on May 29, 2019, made a claim for water damage. The carrier investigated the loss and issued payment; Ms. Hughes disputed the payment, finding the amount insufficient for repairs. On July 1, 2021, Florida Statute §627.70152 went into effect, which required insureds to provide notice of intent to initiate litigation against the carrier prior to filing a lawsuit; if an insured filed the lawsuit without complying with §627.70152, a court must dismiss the case without prejudice. On August 4, 2021, Ms. Hughes filed her lawsuit against Universal for breach of contract. Universal moved to dismiss based on her failure to comply with §627.70152. Ms. Hughes contended the notice requirement could not be applied retroactively. The trial court disagreed and dismissed the lawsuit without prejudice, and Ms. Hughes appealed. During the appeal, the Fourth District Court of Appeal, in Cole v. Universal Property & Casualty, 363 So. 3d 1089 (Fla. 4th DCA 2023), ruled that Florida Statute §627.70152 did apply retroactively to policies issued before the effective date of §627.70152. However, the Sixth District Court agreed with Ms. Hughes and overturned the trial court’s ruling, finding the statute could not retroactively apply to policies issued prior to the statute effective date. Thereafter, the other district courts weighed in, with the Third District Court agreeing with the Fourth District Court, and the First, Second and Fifth District Courts agreeing with the Sixth District Court. In resolving the conflict amongst the district courts, the Supreme Court advised “as a general rule, ‘the statute in effect at the time an insurance contract is executed governs substantive issues arising in connection with that contract.’ Hassen v. State Farm Mut. Auto. Ins. Co., 674 So. 2d 106, 108 (Fla. 1996). The Court applied the two-step test when deciding whether a statute has retroactive application: “First, the Court must ascertain whether the Legislature intended for the statute to apply retroactively. Second, if such an intent is clearly expressed, the Court must determine whether retroactive application would violate any constitutional principles.” Menendez v. Progressive Exp. Ins. Co., 35 So. 3d 873, 877 (Fla. 2010). In analyzing the Legislature’s intent, the Court must determine whether the Legislature has manifested a clear command for retroactivity in the statutory text.  In review of the statutory text, the Court found nothing in the language of the statute to indicate that the phrase “all suits” was serving another purpose of expanding its reach to suits based on policies that both predate and postdate the enactment of the statute. Buis v. Universal Prop. & Cas. Ins. Co., 394 So. 3d 738, 741 (Fla. 2d DCA 2024). Further, the Court noted the statute has an effective date, which has long been considered to be evidence against retroactive application of a statute. The Court concluded that, on its face, no provision of §627.70152 speaks to application of the statute to insurance policies issued before the statute’s effective date and therefore, the Legislature did not clearly command retroactivity of the statute to include insurance policies issued prior to the enactment of the statute. The Court briefly reviewed Universal’s argument that the presuit notice requirement was procedural, not substantive, and therefore should be applied retroactively; however, the Court agreed with the Sixth District Court’s finding that, in its entirety, §627.70152 transformed an insured’s ability to sue an insurance company under a property insurance policy and an insurer’s obligations to respond to and pay insurance claims, thus making the requirement a substantive change. The Court thereby upheld the decision of the Sixth District and disapproved the decision of the Fourth District in Cole.

Thought Leadership

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In this case, the claimant sustained a work injury of January 6, 1994, which was acknowledged by Notice of Compensation Payable (NCP). After the claimant’s receipt of 104 weeks of temporary total disability benefits, the employer filed a Request for an Impairment Rating Examination (IRE). The IRE was performed in May 2023 and the IRE physician found that the claimant had a 5% whole person impairment, under the AMA Guides. The employer filed a Petition based on the IRE results, and the Petition was granted by the WCJ. During litigation, the claimant argued that the IRE provisions of Act 111 (Section 306(a.3) of the Act) were not applicable to her injury, since it predated June 24, 1996, the date Act 57 went into effect, and that the IRE provisions were unconstitutional. The Workers’ Compensation Judge (WCJ)) granted the Petition and the Board affirmed. On appeal to the Commonwealth Court, the claimant argued that Act 111 violated the nondelegation doctrine and that its retroactive application to the claimant’s injury was unconstitutional. The court rejected the arguments on the basis that they had already found the same arguments without merit in multiple, prior cases. The court also addressed an argument made by the claimant that Act 111 was procedurally defective under the Pennsylvania Constitution because it was only considered on two days in each House after having undergone amendments and reassignments. The court noted that the Pennsylvania Constitution requires every bill to be considered on three different days in each House. The claimant maintained that, according to the legislative history, the bill did not receive three separate days of consideration from each House when it was assigned a new bill number. The court pointed out, however, that the bill number, H.B. 1840 remained constant and was considered on three occasions by the House. Further, the court concluded that minor amendments to the bill were germane to its original subject, which was to modify the Act’s IRE process, in accordance with Protz II.

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The Tolling Trap: Filing Alone Will Not Toll the Statute Without Good-Faith Service

The Eastern District of Pennsylvania recently reinforced a critical limitation on bad faith claims, holding that a timely filing alone will not preserve a cause of action absent a good-faith effort to serve the original process. The plaintiff had presented a claim for underinsured motorist benefits to his auto insurer. The insurer evaluated the claim and determined that the plaintiff’s accident-related damages did not exceed the bodily injury liability insurance limits of the at-fault driver and denied his claim. Among other claims, the plaintiff sought to present a claim for insurance bad faith under 42 Pa. C.S.A. § 8371, to which a two year statute of limitation applies. He first filed a praecipe for writ of summons before the expiration of the statute of limitation. However, the plaintiff did not attempt to serve the praecipe or writ until after the statute of limitations had expired. Additionally, the service failed as the plaintiff had mailed the original process to an incorrect address. Despite receipt of the Postal Service’s failure to deliver the original process, the plaintiff did not attempt to re-serve the writ. Two months later, the plaintiff filed a complaint and then successfully served that complaint. The insurer sought to dismiss the plaintiff’s bad faith claim as time-barred by the statute of limitations. The district court agreed. Though the plaintiff had filed a praecipe for a writ of summons prior to the expiration of the statute of limitations, the statute is only tolled if there is a good faith effort to serve that original process. In this case, the court determined that the plaintiff had failed to perform a “good faith effort to serve the original process”. Additionally, though the filing and service of a complaint can serve as alternative original process when the lawsuit is commenced by the filing of a praecipe for a writ of summons, the plaintiff filed his complaint after the statute of limitations had expired. The plaintiff’s bad faith claim was therefore determined to be barred by the statute of limitations and dismissed by the court, with prejudice. A key takeaway for the defense is not to assume that the statute of limitations has been successfully tolled by a plaintiff merely because a praecipe for a writ of summons or complaint has been filed prior to the expiration of the statute. A filed complaint or writ is only part of the equation. The defense should carefully review the docket and filings to confirm that the plaintiff also performed the requisite good faith effort to serve that original process. A thorough review of the docket may reveal that the plaintiff failed to make the good-faith service efforts necessary to toll the statute of limitations.

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Event

CLM 2026 Focus Conference

Allison joins three insurance industry leaders to discuss how cyber coverage disputes, the growing impact of social inflation on bodily injury claim valuation, and the use of artificial intelligence are reshaping the bad faith landscape. The panel will examine emerging sources of extra-contractual exposure, including evolving cyber insurance coverage issues and the challenges of accurately valuing bodily injury claims. Practical approaches to claim evaluation using AI, along with defense strategies designed to help prevent or successfully defend against bad faith litigation, will also be addressed. 

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