Recorded Easements & Disclosure Duties: Ashmus v. Coughlin (2025) Refines the Meaning of “Material Defect” Under Ohio’s Residential Property Disclosure Regime

1. Introduction

In Ashmus v. Coughlin, 2025-Ohio-2412, the Supreme Court of Ohio revisited sellers’ statutory duty to complete the Residential Property Disclosure Form (“RPDF”) mandated by R.C. 5302.30. The Court addressed whether a seller must disclose a publicly recorded, fully functioning sanitary-sewer easement that might obstruct a buyer’s planned redevelopment of the land. By holding that such an easement is not a “material defect” within the meaning of the statute or the RPDF, the Court reversed the Eighth District Court of Appeals and reinstated summary judgment for the seller, Keith Ashmus.

The parties were:

• Appellant / Plaintiff: Keith Ashmus, owner-seller of a lakefront residence in Bay Village, Cuyahoga County.
• Appellees / Defendants: Thomas and Melissa Coughlin, prospective purchasers who intended to raze the existing dwelling and build a new “dream home.”

The dispute crystallized after the buyers discovered—outside the contractually limited due-diligence window—that a 1964 recorded sewer easement traversed the lot. Claiming nondisclosure and fraud, they refused to close. The seller resold at a lower price and sued for the shortfall.

2. Summary of the Judgment

• The sewer easement did not constitute a “material defect” under Section N of the RPDF because:
  • It was a working sewer line (therefore no ‘defect’), and
  • It would not inhibit an ordinary buyer’s use of the property as a residence.
• Consequently, the seller had no duty to disclose the easement on the RPDF.
• The buyers’ fraudulent-concealment counterclaim failed for lack of a duty, and their non-performance constituted breach.
• The trial court’s award of summary judgment (and $93,500 damages) to the seller was reinstated; the court of appeals’ contrary ruling was reversed.

3. Analysis

3.1 Precedents & Authorities Cited

1. Layman v. Binns, 35 Ohio St.3d 176 (1988) – classic exposition of caveat emptor, distinguishing latent and patent defects.
2. Majoy v. Hord, 2004-Ohio-2049 – clarifies that R.C. 5302.30 creates no standalone cause of action; fraud principles govern.
3. Eiland v. Coldwell Banker Hunter Realty, 122 Ohio App.3d 446 (8th Dist. 1997) – effect of “as-is” clauses on disclosure duties.
4. Brewer v. Brothers, 82 Ohio App.3d 148 (12th Dist. 1992) – examples of electrical “defects.”
5. Dennison v. Koba, 86 Ohio App.3d 605 (9th Dist. 1993) – basement wall cracks as defects.
6. Di Pippo v. Meyer, 24 Ohio App.2d 86 (1st Dist. 1970) – inoperative systems as defects.
7. Irvin’s Lessee v. Smith, 17 Ohio 226 (1848) – recorded encumbrances constitute constructive notice (cited but not reached).

These authorities framed the Court’s treatment of “defect,” buyer diligence, and the statutory overlay provided by R.C. 5302.30.

3.2 Core Legal Reasoning

1. Textual focus on “material defect.” Employing ordinary-meaning canons and Webster’s definitions, the Court observed that a “defect” implies inadequacy or flaw. A functioning municipal sewer line, even if inconveniently sited, lacks such inadequacy.
2. Grammatical analysis of “a person’s use.” Section N’s use of the indefinite article “a”—not “the” or “this”—signifies an objective, reasonable user standard. Thus, the inquiry is whether the condition hampers any typical occupant’s residential use, not a purchaser’s idiosyncratic redevelopment plan.
3. Interaction with the “as-is” clause & caveat emptor. Because the parties expressly agreed the sale was “as is,” common-law obligations to disclose latent defects were already curtailed. The statute did not resurrect a duty where the condition fell outside “material defect.”
4. Public Record & Non-observability. Although the Court declined to rest its holding on constructive notice, it noted that a condition listed in public records strains the concept of “non-observable.”

3.3 Practical & Doctrinal Impact

• Clarifies scope of seller disclosure: Sellers of Ohio residential real estate need not list publicly recorded, operational easements or encumbrances unless they actually constitute defects that would impair normal residential use.
• Objective “ordinary buyer” test: By adopting an ordinary-use benchmark, the Court forecloses buyer arguments premised on special or future-development purposes. This curtails opportunistic rescissions late in a transaction.
• Drafting implications for practitioners:
  • Buyers’ counsel may emphasize extended due-diligence periods and explicit representations regarding development feasibility.
  • Sellers’ counsel can rely on the precedent when advising clients about the limited universe of disclosures under Section N.
• Title & Easement diligence: The decision nudges buyers toward thorough title examination rather than reliance on disclosure forms for matters of public record.
• Litigation strategy: Summary-judgment posture is strengthened where alleged nondisclosures concern conditions not meeting the refined test.

4. Complex Concepts Simplified

Caveat Emptor

Latin for “let the buyer beware.” Under this doctrine, buyers shoulder the risk of evident defects unless the seller actively conceals them.

Latent vs. Patent Defect

Latent: Hidden and not discoverable on reasonable inspection (e.g., internal plumbing leak).
Patent: Readily observable (e.g., cracked window). Historically, sellers had to reveal only latent defects; R.C. 5302.30 expands disclosure to certain patent defects but only if they are “material.”

Easement

A non-possessory right to use another’s land for a limited purpose (here, a sanitary-sewer line). Easements are typically recorded; they do not signify a defect unless they impede ordinary use.

Constructive Notice

The legal fiction that parties are “deemed” to know facts recorded in public registries, regardless of actual knowledge.

As-Is Clause

Contractual language wherein the buyer accepts the property in its present condition, thereby limiting the seller’s liability for undisclosed defects, except for deliberate fraud.

Summary Judgment

A procedural device allowing courts to dispose of claims where no genuine issue of material fact exists and one side is entitled to judgment as a matter of law.

5. Conclusion

Ashmus v. Coughlin signals a measured, text-centric approach to Ohio’s residential property disclosure statute. By:

• Insisting on the ordinary meaning of “defect,”
• Employing an objective user standard (“a person’s use”), and
• Respecting contractual “as-is” allocations,

the Supreme Court shields sellers from liability for non-defective, publicly recorded encumbrances while placing the burden of specialized redevelopment risks on buyers. For future litigants and transactional lawyers alike, the decision narrows what qualifies as a “material defect,” reinforces the importance of diligent title review, and realigns expectations in Ohio’s robust residential marketplace.