Hollinger v. Dietrich: Seller Disclosure and Agent Liability

In Hollinger v. Dietrich, 2026 Pa. Super. LEXIS 328 (2026), the Superior Court of Pennsylvania addressed three recurring issues in residential real estate litigation: the liability of real estate agents for undisclosed defects, the filing deadline under the Real Estate Seller Disclosure Law (RESDL), and whether buyers may rely upon a seller's disclosure statement to support alternative claims after the RESDL filing period has expired.

The court's decision provides important guidance to buyers, sellers, agents, brokers, and their counsel. Most notably, the court confirmed that liability cannot be imposed upon a real estate agent based merely on what the agent allegedly should have known. The court also concluded that the RESDL's two-year filing period operates as a statute of repose and cannot be extended through application of the discovery rule.

Because disputes involving water infiltration and other latent defects remain among the most common sources of residential real estate litigation, the decision is likely to have significant implications in future disclosure-related claims.

Factual Background

The dispute arose from the sale of a residential property in Wyomissing, Pennsylvania.

Prior to settlement, the seller provided a Seller's Disclosure Statement (SDS) indicating that she was unaware of basement water infiltration, repairs undertaken to control water or dampness, or other drainage or flooding issues affecting the property. The agreement of sale contained an integration clause, and the SDS was not expressly incorporated into the agreement.

Following settlement, the buyers allegedly discovered flooding in the basement and later claimed that water infiltration was a recurring issue affecting both the property and the surrounding neighborhood.

The buyers ultimately sued the seller and the real estate agents involved in the transaction, asserting claims under the RESDL as well as claims for fraud, negligence, breach of contract, civil conspiracy, and violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL).

Agent Liability Requires Property-Specific Knowledge

One of the most significant aspects of Hollinger concerns the claims asserted against the real estate agents.

The buyers argued that because both agents resided near the property and were familiar with the neighborhood, they knew or should have known that flooding was a recurring problem in the area. According to the buyers, that knowledge should have been disclosed before the transaction closed.

The Superior Court rejected that argument.

In doing so, the court drew an important distinction between actual knowledge of conditions affecting a specific property and generalized knowledge of conditions that may exist elsewhere in a neighborhood. The fact that flooding may occur throughout a community does not establish that a particular property has experienced water infiltration. Likewise, an agent's familiarity with a local market does not automatically translate into knowledge concerning a specific home.

The court further emphasized that Pennsylvania law imposes no independent duty on a real estate agent to investigate the contents of a seller's disclosure statement.

As a result, the buyers' claims failed because they were unable to establish that the agents knew of water infiltration at the specific property, knowingly made false representations concerning the property, or concealed information regarding the property.

The practical significance of this holding should not be overlooked. Buyers frequently attempt to impose liability by arguing that an experienced real estate professional should have inferred the existence of a defect. Hollinger confirms that claims against agents must be supported by evidence tied to the property itself, rather than assumptions derived from neighborhood conditions or general market familiarity.

At the same time, the decision should not be interpreted as insulating agents who possess actual knowledge of a defect. An agent who knowingly communicates false information or conceals material information concerning a property may still face liability. The court simply declined to equate actual knowledge with speculation regarding what an agent should have discovered.

The RESDL'S Two-Year Deadline Cannot Be Extended 

The court next examined Section 7311(b) of the RESDL, which requires actions seeking damages under the statute to be commenced within two years of final settlement.

Although the statute labels the provision a "statute of limitations," the Superior Court concluded that it functions as a statute of repose.

The distinction is significant. A statute of limitations generally begins to run when a claim accrues, while a statute of repose begins running from a legislatively identified event regardless of when the alleged injury is discovered.

Under Section 7311(b), the triggering event is final settlement.

Because the buyers settled on the property in July 2017 but did not commence suit until March 2020, the court concluded that their RESDL claims were untimely. The fact that the alleged flooding was discovered after settlement did not alter the analysis.

For practitioners, the lesson is straightforward. The RESDL filing period must be calculated from the date of settlement, not from the date a defect is discovered. Buyers who uncover potential disclosure issues after closing should evaluate their claims promptly because the passage of time alone may extinguish the statutory remedy.

At the same time, the decision provides certainty for sellers and real estate professionals by establishing a clear endpoint for RESDL liability.

Buyers Cannot Use the SDS to Avoid the Repose Period 

The Superior Court also addressed whether an SDS may be used to support alternative causes of action after the RESDL filing period has expired.

After their RESDL claims were barred, the buyers attempted to rely upon the seller's disclosure statement to support claims for breach of contract, negligence, and violations of the UTPCPL.

The Superior Court rejected that approach.

According to the court, permitting the mandatory disclosure statement to serve as evidence supporting alternative claims after expiration of the RESDL filing period would effectively expand the remedies authorized by the statute and undermine the temporal limitations established by the General Assembly.

In practical terms, buyers may not avoid the RESDL's deadline simply by repackaging an untimely disclosure claim under a different legal theory.

The Importance of the Integration Clause 

The agreement of sale's integration clause also played a meaningful role in the court's analysis.

An integration clause generally provides that the written agreement constitutes the parties' complete understanding. Here, although the SDS was provided during the transaction, it was not expressly incorporated into the agreement of sale.

As a result, the buyers could not rely upon the SDS itself to transform the seller's statements into contractual promises after the RESDL filing period had expired.

The decision serves as a reminder that transaction documents should clearly identify which representations survive settlement and which documents are intended to form part of the parties' contractual agreement. If particular disclosures are intended to create contractual obligations, that intent should be addressed expressly rather than left to implication.

Conclusion

Hollinger v. Dietrich establishes three important principles for Pennsylvania residential real estate disputes.

First, a real estate agent's familiarity with neighborhood conditions does not establish actual knowledge of a defect affecting a specific property. Without property-specific evidence, allegations that an agent "should have known" are insufficient.

Second, the RESDL's two-year filing period runs from final settlement and operates as a statute of repose that cannot be extended through the discovery rule.

Third, buyers may not rely upon a mandatory seller disclosure statement to support alternative claims after the RESDL filing period has expired, particularly where the agreement of sale contains an integration clause and does not incorporate the disclosure statement.

For buyers, sellers, agents, brokers, and their counsel, the decision underscores the importance of prompt claim evaluation, thoughtful contract drafting, and property-specific evidence when litigating disclosure-related disputes.

This article was prepared by a licensed Pennsylvania attorney at Nochumson P.C., a Philadelphia-based law firm with extensive experience in all thing's real estate, litigation, land use and zoning, and business counseling.