A recent appellate court decision in Illinois emphasizes yet again the need for buyers to include any and all representations and covenants of sellers expressly in the real estate contract – if you expect to be able to rely on them and enforce them against the sellers later.

In the case of Siegel Development, LLC v. Peak Construction, LLC, the buyer of a multi-family building in Chicago that needed major repairs thought that it also had secured a good deal through the seller for the necessary rehab construction work to occur post-closing. After the buyer closed on the purchase of the building, however, the desirable construction contract through the seller did not materialize, and the buyer was left with an old building in poor condition, and without the rehab. The buyer sued – but without the seller’s alleged promises as to the rehab included in the contract, it was forced to pursue a claim for fraud, which is much harder to prove than a breach of contract. After analyzing the facts, including the various discussions and meetings that occurred as to the rehab deal, the court found the alleged promises to be too vague to be justifiably relied upon or considered fraudulent, and ruled against the buyer.

There can be many reasons why the promises of a seller do not make their way into real estate contracts – but trying to enforce those promises later usually leads to the same unhappy result for a buyer.