While we reaffirm our commitment to the rules of law regarding fraud that are relied upon by the appellant, we cannot agree that the record supports his request that we apply these rules of law to the facts of this case. The elements of fraud are set out in Johnson v. Soulis, Wyo. 1975, 542 P.2d 867; Davis v. Schiess, Wyo. 1966, 417 P.2d 19; and see Miles v. Love, 1977, 1 Kan. App. 2d 630, 573 P.2d 622, 624. The only evidence presented by appellant was his own version of the discussions before the purchase and the fact that testing of the water supply after the purchase revealed that the water supply, although bacteriologically safe, was not fit for human consumption because of dissolved mineral content.

Absent protections provided by contract or by law, buyers of real property in Kansas take under the principle of caveat emptor. See Graham v. Lambeth, 22 Kan.App.2d 805, 807, 921 P.2d 850 (1996); Heinsohn v. Motley, 13 Kan.App.2d 66, Syl. ¶ 2, 761 P.2d 796 (1988); Miles v. Love, 1 Kan.App.2d 630, 633, 573 P.2d 622,rev. denied 225 Kan. 845 (1997). “Kansas has recognized an implied warranty of fitness in the sale of new housing, at least when the seller built the house.”

In Hays v. Gilliam (Tenn. Ct. App. 1983), 655 S.W.2d 158, the structure was an apartment building rather than a home, was not recently constructed since it had been under construction for five years, and was purchased by an investor in a commercial enterprise rather than a naive home buyer. The structure in Miles v. Love (1977), 1 Kan. App. 2d 630, 573 P.2d 622, had a recently built addition but was nevertheless "a basically used house" ( Miles, 1 Kan. App. 2d at 633, 573 P.2d at 625), and the defects existed in the used house before the additions. In contrast, here there was only a foundation, and no "used house" in which the defects could have existed.

"The necessary elements of fraud are: (1) that the representation was made as a statement of a material fact; (2) that the statement was known to be untrue by the party making it, or was made with reckless disregard for the truth; (3) that the party alleging fraud was justified in relying upon the statement; (4) that the party alleging fraud actually did rely upon the statement; and finally (5) that as a result of this reliance, the party alleging fraud was damaged." Miles v. Love, 1 Kan.App.2d 630, 631-32, 573 P.2d 622, 624 (1977).        See also Goff v. American Savings Association, 1 Kan.App.2d 75, 78, 561 P.2d 897 (1977).

Those elements include: a material misrepresentation, that was false, the representation was known to be false or was made in reckless disregard for the truth, the defendant intended for the plaintiff to rely on the statement, and the plaintiff suffered damage as a result. Gibb v. Citicorp Mortg, Inc., 518 N.W.2d 910, 915 (Neb. 1994); Miles v. Love, 573 P.2d 622, 632 (Kan. 1977). The court does note that it could make a difference which law applies if this issue proceeds to trial.

Sippy v. Cristich, 4 Kan. App. 2d 511, Syl. ¶ 2, 609 P.2d 204 (1980). Furthermore, actual knowledge of the defect must be shown to support a claim of fraudulent concealment, Miles v. Love, 1 Kan. App. 2d 630, 632, 573 P.2d 622, rev. denied, 223 Kan. clxxi (1977), and the matters concealed must be material to the transaction. Griffith v. Byers Construction Co., 212 Kan. 65, 73, 510 P.2d 198 (1973).

Goff v. American Savings Association, [ 1 Kan. App. 2d 75, 78, 561 P.2d 897 (1977)].Miles v. Love, 1 Kan. App. 2d 630, 573 P.2d 622, 624 (1977). Kansas courts have also recognized an action based on fraud when material facts have been fraudulently concealed from a buyer by a vendor.

The Court further concludes that Sunflower is entitled to interest on its overpayments, as provided for in K.S.A. § 16-201, as amended, to be calculated from the dates the overpayments were "due" under section 5.1, as set forth in defendant's exhibit 52. The Court cannot conclude, however, that the Dorchester group's demands for payment of the one-cent increase, coupled with Sunflower's acquiescence in that demand, are sufficient to constitute actionable fraud that might entitle Sunflower to punitive damages, because two of the five necessary elements set out in Miles v. Love, 1 Kan. App. 2d 630, 631-32, 573 P.2d 622 (1977), were not established: it was not shown that plaintiff's misrepresentations were made knowingly or in reckless disregard of the truth, nor that Sunflower's reliance upon these representations was justified. Had Sunflower bothered to consult the contract, it might well have disabused itself of the notion that the price increase had taken effect.

See, e.g., Lee v. Clark Assocs. Real Estate, Inc., 512 So.2d 42 (Ala. 1987); Aas v. Super. Ct., 24 Cal.4th 627, 101 Cal.Rptr.2d 718, 12 P.3d 1125 (2000) (superseded by statute on other grounds); Cosmopolitan Homes, Inc. v. Weller, 663 P.2d 1041 (Colo. 1983); Cobum v. Lenox Homes, Inc., 173 Conn. 567, 378 A.2d 599 (1977); Council of Unit Owners of Sea Colony East, Phases III, IV, VI VII v. Carl M. Freeman Assocs., Inc., 1989 WL 48568 (Del.Super. 1989); Drexel Props., Inc. v. Bay Colony ClubCondo., Inc., 406 So.2d 515 (Fla.Dist.Ct.App. 1981), disapproved of on other grounds by Casa Clara Condo. Ass'n, Inc. v. Charley Toppino Sons, Inc., 620 So.2d 1244 (Fla. 1993); Dunant v. Wilmock, Inc., 176 Ga. App. 48, 335 S.E.2d 162 (1985); Miles v. Love, 1 Kan.App.2d 630, 573 P.2d 622 (1977); Real Estate Mktg., Inc. v. Franz, 885 S.W.2d 921 (Ky. 1994); Tereault v. Palmer, 413 N.W.2d 283 (Minn.Ct.App. 1987); John H. Armbruster Co. v. Hayden Co. — Builder Developer, Inc., 622 S.W.2d 704 (Mo.Ct.App. 1981); Butler v. Caldwell Cook, Inc., ill A.D.2d 559, 505 N.Y.S.2d 288 (1986); Brown v. Fowler, 279 N.W.2d 907 (S.D. 1979); Briggs v. Riversound Ltd. P'ship, 942 S.W.2d 529 (Tenn.Ct.App. 1996); Schafir v. Harrigan, 879 P.2d 1384 (Utah Ct.App. 1994); Northridge Co. v. W.R. Grace Co., 162 Wis.2d 918, 471 N.W.2d 179 (1991). Other jurisdictions do permit subsequent purchasers to recover for a breach of the implied warranty of workmanlike construction.

The McGehees specifically take issue with the district court's finding that, having lived in the house for 15 years, they must have known about the leakage problem. In support, the McGehees cite Miles v. Love, 1 Kan. App. 2d 630, 632, 573 P.2d 622, rev. denied 225 Kan. 845 (1977), for the premise that implied knowledge is insufficient to maintain a cause of action for fraud and that actual knowledge is required. However, the McGehees ignore the fact that the evidence established actual, not implied, knowledge on their part. Mrs. McGehee testified about two other incidents of leakage which she claimed she had forgotten to mention in the seller's disclosure statement.