In addition, the homeowner will have the right to assert a claim for the cost to repair or to replace latent defects under the implied warranty of habitability but the homeowner will be able to assert this claim if, and only if, the contract does not contain a valid disclaimer that waived the homeowners rights under the implied warranty of habitability. NLR does not answer legal questions nor will we refer you to an attorney or other professional if you request such information from us. Aug. 30, 2019 Warranty of Habitability is implied or express in every lease agreement. Provide fire exits that are usable, safe, and clean. Because the implied warranty of habitability is a creature of contract law, the Supreme Court reasoned that in order for an implied warranty to exist, the buyer must have a contractual relationship with the subject of his or her ire the subcontractor. In Sinema Court Condominium Assoc. This conflict is the backdrop to the enactment of the Consumer Fraud the theory suffered several setbacks," with some courts refusing to apply the war-ranty because of caveat emptor or merger. in fairness, the repair costs of defective construction should be borne by the builder-seller who created the latent defects. As a baseline, tenants damages may be calculated by subtracting the fair rental value of the property from the defect that made it uninhabitable from the fair rental value of the property that had been habitable. In Illinois, . For more information about implied habitability, contact Arlington Heights real estate lawyer Roger W. Stelk at 847-506-7330. . Business Continuity / Ownership Management Succession, Commercial Litigation and Dispute Resolution. Plaintiffs Allege Failure to Declare Presence of Additives on Sparkling Water Class Action Year in Review: The Rise Of The Self-Tapping Website? Something went wrong while submitting the form. P: (312) 368-0100 Group., 2013 IL App (1st) 130744 (Pratt III). It was literally an innovation of judges created to protect homeowners/buyers from unscrupulous builders. Check your local housing codes to see which additional requirements may apply. However, in Illinois, as in most states, one cannot recover for a pure economic or commercial loss through a negligence action (known in Illinois as the Moorman Doctrine)with some exceptions. Illinois joined the revolution in 1972 when the Illinois Supreme Court held in Jack Spring Inc. v. Little "that included in the contracts, both oral and written, governing the tenancies of the defendants in the multiple unit dwellings occupied by them, is an implied warranty of habitability . . Effective [sic.] If you would ike to contact us via email please click here. The Richard Group of Chicago (116 Ill. App. in illinois, the implied warranty was first recognized in the landlord-tenant context in jack spring, inv. 1324 W. Pratt Condo. SECURE 2.0 Series Part 3: Retirement Plan Required Minimum Court Affirmed Summary Judgment For A Financial Advisor Due To The AUSTRALIA: ASIC Starts 2023 With Focus On Greenwashing. Check your email for your free Estate Planning Guide. For these reasons, the Association could not pursue a claim for breach of an implied warranty of habitability against the general contractor. Observing that the purpose of the implied warranty is to protect innocent purchasers, the Minton court held that where the innocent purchaser has no recourse to the builder-vendor and has sustained loss due to the faulty and latent defect in their new home caused by the subcontractor, the warranty of habitability applies to such subcontractor. Id. For many of us of a certain age, our first exposure to the Latin phrase caveat emptor came from an episode of the classic sitcom, The Brady Bunch. In Bd. As you can see, Illinois state law does not describe the specific obligations of landlords when it comes to habitability, but Illinois landlords must remain compliant with housing, building, health codes or by community standards. ", Another case, this one in 1985, helped further define the scope of the warranty.2 Rental units in Illinois must be"habitable and fit for living" and remain that way for the entirety of the lease. In Park Point, the plaintiff argued that Minton should be extended not only to subcontractors, but also to architects. Such claims will be governed by the terms of the parties contract. All Rights Reserved. Defendant moved to dismiss. Most states have state statutes regarding habitability; however, this ruling (among others) has established the implied warranty of habitability.. See Moorman Manufacturing Co. v. National Tank Co., 435 N.E.2d 443 (Ill. 1982). 1st Dist. The Time Is Now: Comment Period Open For The Federal Trade Commission Canadas Foreign Buyers Ban: What You Should Know About the Ban on CMS Proposed Rule for Refunding Overpayments Would Align With False EPAs Proposal to Tighten the Fine Particulate NAAQS: Whats Proposed Commonwealth Court Strikes Down 2021 Accessibility Regulations as Is Texas Getting Ready to Expand Its Compassionate Use Program? Another Lesson for Higher Education Institutions about the Importance Justice Department Secures Resolution in Sexual Harassment Lawsuit United States Department of Justice (DOJ). These amounts need not be established through experienced testimony because courts have held that the landlord and tenant themselves are competent to testify as to the condition of the property and these values. "your articles on the changes to the child support law are very well-written and informative., In this article, we explain the implied warranty of habitability in Illinois leases. Elements of this action: (1) defects in premises; (2) landlords knowledge of defects; (3) landlords failure to repair defects; (4) the defects would cause a reasonable person to consider the premises unfit, unsanitary, unhealthy or unsafe. The Appellate Court referred to a prior Illinois Supreme Court decision that held . Provide windows and doors that are in good repair. Instead, the defect in the property must cause a reasonable person to consider the property uninhabitable in order for a breach to exist. While general contractors and sub-contractors welcome these recent court decisions, for owners, the pendulum may be slowly swinging back to the days of caveat emptor. You expect a firm that offers integrity, reliability and a personal commitment that is aimed at one idea: finding the right solutions for the challenges and opportunities you encounter every day. February. 3d 852), the Illinois Appellate Court held that if a homeowner has no recourse against a builder or general contractor (usually as a result of insolvency), a property owner may claim a breach of the implied warranty of habitability against the subcontractors performing any defective work. Does Your Cyber Insurance Policy Cover a Ransomware Attack? The Court rejected the plaintiffs argument that architects and builders were similar because their work results in a tangible structure and, and they both must perform their work in a workmanlike manner. The Anti-Money Laundering Act of 2020 Gets a Glow Up: Congress FINRA Files Amendments to Proposed Rule Change That Will Allow Remote Corporate Practice of Medicine Doctrine: Increased Enforcement on the Environmental Justice Update: EPA Announces $100 Million in EJ Grants Insurers Beware of Silent Crypto Exposure: PART III, Silent Crypto Court Rules that Brown Bread is Not Misleading, Whats Next in Washington? He is also a past president of the Society of Illinois Construction Attorneys. The decision refused to extend Minton to allow the implied warranty of habitability to be asserted against architects or material suppliers where the builder-vendor is insolvent. The Court rejected this argument as well, finding there was no evidence to support an assignment. - January 2023 Edition. 3d 852 (Ill. App. See . Many of our clients are going through difficult times in their lives when they reach out to us. Under certain state laws the following statements may be required on this website and we have included them in order to be in full compliance with these rules. In 1961, the Illinois General Assembly passed the Consumer Fraud and Deceptive Business Practices Act, 3 ("Consumer Fraud Act" or "the Act"), in an attempt to eradicate fraud in the marketplace. In Sinema Court Condominium Assoc. All rights reserved. However, the Park Point decision is unlikely to be the last case addressing the application of the implied warranty of habitability to architects or other design professionals. The decision in Sienna Court Condominium Association v. Champion Aluminum Corporation (2810 IL 122022) expressly overrules 35 years of precedent from the 1983 Illinois Appellate Court decision in Minton v. The Richard Group of Chicago (116 Ill. App. Leased premises must be fit for their intended use and habitable for living throughout the term of the lease.. However, the harshness of caveat emptor eventually led to the adoption of the implied warranty of habitability when purchasers discover latent defects in their homes. It used to be that after the sale closed an aggrieved buyer of new construction would not be able to pursue claims against the developer who performed the shoddy work. In 1979, the doctrine was expanded to the purchasers of new homes against the builder-seller, Petersen v. Hubschman Construction Co., 76 Ill. 2d 31 (1979). Statement in compliance with Texas Rules of Professional Conduct. The Court also noted that the implied warranty of habitability is based on the quality of construction work, and shifts the cost of repairing latent defects from the unsophisticated homeowner to those who contributed to the actual construction of the home. See Tassan v. United Development Co., 88 Ill. App. v. Champion Aluminum Corp ., the Illinois Supreme Court determined the implied warranty of habitability is a creature of contract, not tort, which meant a purchaser of a home could not sue a sub-contractor absent privity of contract. It has also been extended to contractors responsible for latent defects in the construction of a home addition. By using this form, I acknowledge that I have not formed an attorney-client relationship. In Philadelphia, Economy Struggles to Keep Up with New Influx of Immigrants. Any legal analysis, legislative updates or other content and links should not be construed as legal or professional advice or a substitute for such advice. Recently, in 1400 Museum Park Condominium Assoc. In contrast, engineers and design professionals provide a service and do not warrant the accuracy of their plans and specifications. Architects do not guarantee a perfect plan or a satisfactory result, and are only liable where their conduct falls below the applicable professional standard of care. In Philadelphia, Economy Struggles to Keep Up with New Influx of Immigrants. v. How Do You Enforce a Judgment from Another State in Illinois? v. Kenny Construction Co. a condominium association unsuccessfully argued its claim for breach of an implied warranty of habitability for plumbing defects was proper against a general contractor since the Sinema decision was limited to sub-contractors. June 21, 2012). It is expected that the plaintiff in Park Point will seek leave to appeal the decision to the Illinois Supreme Court. This includes providing basic amenities like running water, heat, and electricity, as well as ensuring that the property is safe and sanitary. 1983), and held that the association must demonstrate that Platt was insolvent in order to assert a direct IWOH claim against EZ Masonry. Further, the facts of Sienna Court did not fall within an exception to Illinois' Moorman Doctrine that precludes purely economic recovery for negligence claims. As the court noted in the decision, in order "to constitute a breach of the implied warranty of habitability, the defect must be of such a substantial nature as to render the premises unsafe or unsanitary, and thus unfit for occupancy. In expanding the implied warranty of habitability to builders, the court cited public policy considerations and a long line of cases that confirmed the primary objective of the implied warranty of habitability has always been to hold builders themselves accountable for latent defects because they are in the best position to ensure that the residences they build are habitable and free of defects that unsophisticated home buyers are unable to detect. The court noted that the warranty has roots in the execution of the contract for sale and that it has been clear that it exists independently of a sales contract regardless of privity of contract. See 2015 IL App (1st) 123452. The implied warranty of habitability is a legal doctrine created by Illinois case law. Because there was no contractual privity between the buyer and the subcontractor, the Illinois Supreme Court held that regardless of the nature of the defect, no cause of action existed between the purchaser and the subcontractor. On Dec. 28, 2018, the Illinois Supreme Court held that subcontractors that do not contract directly with a homeowner cannot be held liable to the homeowner for breach of the implied warranty of habitability. Financial Institutions Require More Oversight of Cybersecurity Risk Bill Would Allow Shareholders To Phone It In. Clifford J. Shapiro is a partner in the Chicago office of Barnes & Thornburg LLP and Chairperson of the Construction Law Practice Group which consists of attorneys in the firms 14 offices. 1324 W. Pratt Condo. Leased premises must be fit for their intended use and habitable for living throughout the term of the lease. Every state has some version of an implied warranty of habitability, which guarantees a renter the right to things like functioning plumbing and heatbasically, everything necessary to keep a residence habitable. By providing certain contact information herein, you are expressly authorizing the recipient of this message to contact you via the methods of communication provided. Financial Institutions Require More Oversight of Cybersecurity Risk Bill Would Allow Shareholders To Phone It In. In Pratt III, the Court clarified the meaning of insolvency, holding that the date for determining insolvency of the developer or general contractor is the date of the latest amended complaint. These decisions increase liability exposure for residential builders and expand the pool of potentially responsible parties for claims by aggrieved homeowners. The court found nothing whatsoever in the contract to indicate that the individual unit owners agreed to disclaim the warranty as to Platt or EZ Masonry, or that they were even aware of the possible consequences of disclaiming the warranty as to these two parties.. That part of the Illinois Appellate Courts decision is not addressed in the new Supreme Court decision, and it remains the law. The Richard Group of Chicago (116 Ill. App. Automobile & Autonomous Vehicle Liability, Its OfficialIllinois Now Provides for Pre-Judgment Interest, How Not to Handle Return to Work When Accommodations Required, Statutes: The Unconscionable Contract Killer. But the decision confirmed that subcontractors not in privity with the homeowner were potentially liable under the implied warranty, and clarified that the insolvency of the builder-vendor is the determining factor.. Ensure that all floors are in good condition and safe. The implied warranty encompasses the proper design, preparation, and construction of a home. How Law Firms Can Leverage ChatGPT To Get More Cases, FTC Pursues Crackdown on Employee Noncompetes, Chapter 93A Litigation Newsletter | 4th Quarter 2022, Landmark NLRB Decision Expands Labor Violations, Weekly IRS Roundup January 9 January 13, 2023. The Illinois Supreme Court has overturned over thirty years of precedent in holding that property owners cannot sue subcontractors for implied warranty of habitability claims. One exception to the doctrine, injury or damage resulting from a sudden or dangerous occurrence, is a possibility in construction defect cases. Champion Aluminum Corp., 2018 IL 122022, 2018 Ill. LEXIS 1244 (2018), the Supreme Court of Illinois held that buyers of new homes cannot assert claims for breach of the implied warranty of . Although the general contractor obviously had a contract with the now-defunct developer, that relationship was insufficient to permit the condo purchasers, with whom no contractual relationship existed, to directly sue the contractor that actually performed the work for breach of the implied warranty of habitability. In 1324 W. Pratt, a contractor constructed an eight-unit residential building pursuant to its contract with a developer. The Appellate Court began with a discussion about the implied warranty, recognizing its purpose is to protect homeowners from latent defects in their homes which affect the habitability of them. ", [1] Jack Spring, Inc. v Little (1972) 50 Ill 2d 351, 280 NE2d 208, [2] Glasoe v Trinkle (1985) 107 Ill 2d 1, 88 Ill Dec 895, 479 NE2d 915, [3] Jarrell v Hartman (1977, 4th Dist) 48 Ill App 3d 985, 6 Ill Dec 812, 363 NE2d 626, [6] Chicago Building Code: Title 13 Chapter 196. Instead, a tenants right to a habitable rental was created by a 1972 ruling from the Illinois Supreme Court.1 According to the decision, all residential lease agreements in the state contain an implied warranty of habitability. However, if the rental unit is located in an area with no building code, habitability is determined using what the court called community standards.7 This takes into account: In the case cited above, the tenants were awarded damages even though the issues werent specifically in violation of local housing codes (since the town had none). This holding permits homeowners to pursue claims against subcontractors where the developer or general contractor becomes insolvent during the course of the litigation. [ii] 1400 Museum Park Condominium Assoc. 3d 581 (1st Dist. To chat with an Illinois landlord tenant attorney, Click here Landlord Responsibilities in Illinois The following chart lists possible landlord responsibilities when it comes to habitability. 3d 852), the Illinois Appellate Court held that if a homeowner has no recourse against a builder or general contractor (usually as a result of insolvency), a property owner may claim a breach of the implied warranty of habitability against the subcontractors performing any defective work. The First District reversed. The warranty also applies to common areas of a building.3, In Illinois, a substantial violation of the local building code is considered a breach of the warranty of habitability.4 (Minor code violations that dont affect habitability are not considered breaches, however.). Illinois is not the only jurisdiction to apply the implied warranty of habitability to non-vendor builder. Attorney Advertising Notice: Prior results do not guarantee a similar outcome. . At 41. That same lesson was one homebuyers learned for many years. Purchaser acknowledges and understands that if a dispute arises with Seller and the dispute results in a lawsuit, Purchaser will not be able to rely on the Implied Warranty of Habitability described above, as a basis for suing the Seller or as a basis of a defense if Seller sues the Purchaser. Agreeing with these arguments, the trial court dismissed the lawsuit. The Association attempted to rationalize its position by further arguing since the individual unit owners contracted with the developer in sales contracts for the latter to construction their residences, this obligation to construction necessarily extended to the general contractor. The Act is broadly . Pratt moved to dismiss the claims against it on the ground that IWOH applies only to builder-vendors, i.e. 1980); Herlihy v. Dunbar Builders Corp., 92 Ill. App. These recent cases arose out of the construction of a residential condominium building in Chicago. Any result in a single case is not meant to create an expectation of similar results in future matters because each case involves many different factors, therefore, results will differ on a case-by-case basis. It was first recognized in Petersen v. Hubschman Construction Co., 76 Ill. 2d 31 (1979). Nursing Homes Brace for Reforms and Heightened Government Scrutiny. If you have any questions about the impact of this ruling, please contact your Miller Canfield attorney. State Green and Sustainability Claims: A Roundtable Discussion. implied warranty of habitability, and common law fraud. Chicago, Illinois 60601 For example, on August 19, 2008, the Arizona Supreme Court ruled, in The Lofts at Fillmore v. Reliance Commercial Construction, that a builder of a new home, whether or not they are also the vendor of the new home, impliedly warrants that construction has been done in a workmanlike manner and that the home is habitable and, further, that a direct contractual relationship between a builder and homebuyer is unnecessary for a homebuyer to bring an implied warranty claim against the builder. In this episode, we explain the implied warranty of habitability in Illinois leases. 3d 310 (1st Dist. Landlords are required to exterminate pests, as long as the tenant has not caused the issue by their own actions. Rejecting the associations attempt to rely on Pratt I, the court cautioned that it had not considered the applicability of the IWOH to subcontractors in that opinion. The FTC's Proposed Rule Banning Noncompete Agreements- What Does It Mean? . 1324 W. Pratt Condominium Association v. Platt Construction Group, Inc., 2012 WL 2369561 (Ill. App. If the contract includes a valid disclaimer, the homeowner will not be protected by the implied warranty of habitability even against the builder-vendor that sold the home. The purchasers, therefore, were left to sue the general contractor directly. The court reaffirmed Minton v. The Richards Group of Chicago, 116 Ill. App. Kevin OFlaherty is a graduate of the University of Iowa and Chicago-Kent College of Law. The problems were serious, though: the tenants had, at various times, dealt with a lack of heat in the winter, sewage leaking through the ceilings, overflowing toilets due to plumbing issues, sewage in the yard, roach and rodent infestations, and a hole in the decaying back porch. The courts reasoning was based in part on the Illinois Supreme Courts recent decision in Sienna Court Condominium Association v. Champion Aluminum Corporation, 2018 IL 122022 holding that a purchaser of a newly constructed condominium cannot pursue a claim for breach of the implied warranty of habitability against a subcontractor where the subcontractor had no contractual relationship with the purchaser. The Supreme Court examined a more fundamental threshold question of whether a homeowner can bring a claim against a subcontractor under the implied warrant of habitability per the ruling in Minton and its progeny. Group., 404 Ill. App. 1-10-0159, 2010 WL 3788057 (1st Dist. 1980). The National Law Review is a free to use, no-log in database of legal and business articles. [i] Recently, in 1400 Museum Park Condominium Assoc. No attorney-client or confidential relationship is formed by the transmission of information between you and the National Law Review website or any of the law firms, attorneys or other professionals or organizations who include content on the National Law Review website. In Illinois, it's based on case law rather than state statutes and relies heavily on local housing codes. As a result, courts have repeatedly declined to increase those contractual obligations by implying a warranty of habitability. THE SELLER HEREBY DISCLAIMS AND THE PURCHASER HEREBY WAIVES THE IMPLIED WARRANTY OF HABITABILITY DESCRIBED UB PARAGRAPH 10(B) ABOVE AND THEY ACKNOWLEDGE, UNDERSTAND AND AGREE THAT IT IS NOT PART OF THE CONTRACT. In reaching its decision, the Park Point court characterized the implied warranty as a warranty of the habitability of construction work. 2015 IL App (1st) 123452 at 12. The content and links on www.NatLawReview.comare intended for general information purposes only. In reaching its ruling, the Park Point court examined the history and underlying public policies of the implied warranty of habitability. Plaintiffs Allege Failure to Declare Presence of Additives on BOEM Proposes to Modify its Offshore Renewable Energy Regulations. The purpose of a consultation is to determine whether our firm is a good fit for your legal needs. Statement By Secretary Walsh On the Telecommunications Workforce EPA Announces Appointments to Local Government Advisory Committee. In Illinois, a seller of real property was not liable to a purchaser for defects in the design or construction of the property which existed, even in a latent state, at the time of the sale. Unlike some other states, Illinois doesnt have an actual law on the books that establishes the warranty of habitability. The implied warranty of habitability ("IWOH") originally extended to "builder/vendors" in Illinois. It argued that the implied warranty does not extend to a builder such as itself who was not also the vendor. A Laurie & Brennan article featured in the Construction Law Corner Winter 2011 eNewsletter. See the table below for which are and arent included. He hasexperience in litigation, estate planning, bankruptcy, real estate, and comprehensive business representation. Statement in compliance with Texas Rules of Professional Conduct. Elizabeth Souza, In Illinois, a landlords obligation for providing a habitable living space is primarily governed by case law and more specifically a Supreme Court ruling, Jack Spring, INC. v. Little (1972) 50 III 2d 351, 280 NE 2d 208. In 1980, the warranty was extended to the purchasers of new condominium units, and included construction defects in the common elements of a condominium complex. Enter your email below for your free estate planning e-book. The FTC's Proposed Rule Banning Noncompete Agreements- What Does It Mean? By refusing to extend Minton to architects, Park Point may leave some aggrieved homeowners without recourse against an architect for design defects in their home. After remand, the association filed an amended pleading against the developer, Platt and EZ Masonry for breach of the IWOH. Mississippi Gaming Commission Agenda: January 19 Meeting. With those facts as an exception to Moorman, the court's reasoning on subcontractor liability in Sienna Court could have been swayed. The implied warranty of habitability (IWOH) originally extended to builder/vendors in Illinois. 1st Dist. The city of Chicago has additional requirements regarding bedbugs that both landlords and tenants must follow. The implied warranty of habitability has also been applied to allow subsequent purchasers to recover against the original builder-vendor for latent defects which are discovered within a reasonable time after purchase. Entertaining and educating business content. The implied warranty of habitability is a creature of the law. He is a Fellow in the prestigious American College of Construction Lawyers, is ranked as a Band One construction attorney by Chambers USA, is listed as one of the top 10 construction lawyers in Illinois by Leading Lawyers and listed in the Best Lawyers in America. The Court concluded that Minton claims are properly limited to those who are involved in the sale or physical construction of a residence, and that the extension of a Minton claim against an architect, which had no role in the construction or sale of the property would be a considerable extension of the law.. Importantly, if the contract includes an express warranty, the homeowners rights will include (and may be limited by) the terms and conditions contained in that express warranty in the contract. The implied warranty of habitability in Illinois does not apply to all types of dwellings. Do you also have rights to the 2023 Levin Ginsburg. Provide working wiring for one telephone jack. Shortly after closing, owners discovered water leaks in units and common areas. Oops! NLR does not answer legal questions nor will we refer you to an attorney or other professional if you request such information from us. The choice of a lawyer or other professional is an important decision and should not be based solely upon advertisements. In both cases, the home purchaser is an ordinary person not knowledgeable of construction practices, who must rely upon the integrity and skill of the builder (or the developer who has chosen the builder) to a substantial degree. In Illinois, its based on case law rather than state statutes and relies heavily on local housing codes. Historically, the purchaser of a newly constructed home took the property at his or her own risk if they failed to discover a hidden or latent defect in the homes design or construction prior to the closing of the sale. You Meta Believe the GDPR Penalties Are No Joke! A tenant can enforce this warranty by filing an action against its landlord in an individual capacity, using it as a defense to an eviction action initiated by a landlord based on non-payment of rent, and/or in a class-action lawsuit. ."7 Both before and after Jack The Park Point court rejected the plaintiffs arguments. The defect must be of such substantial nature as to render the premises unsafe or unsanitary. Id. Provide working gas lines if used for utilities/cooking. The Court rejected the argument for a simple reason: the general contractor was not a party to the sales contracts on which the Association relied. California Labor Commissioner Issues FAQs Clarifying Pay Transparency AI-Based Discrimination Top of the EEOCs Draft Enforcement Plan, Class Action Year in Review: BIPA Class Actions, Version 2 Proposed Draft Rules for the Colorado Privacy Act. It further contended that the negligence claim was barred by the economic loss rule. 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Keep Up with New Influx of Immigrants for a breach to exist city of Chicago has additional requirements bedbugs... Workforce EPA Announces Appointments to local Government Advisory Committee result, courts have repeatedly declined to increase contractual... Habitability to non-vendor builder business Continuity / Ownership Management Succession, Commercial litigation and Dispute Resolution links. And arent included free estate planning Guide Hubschman construction Co., 76 Ill. 2d (! Based solely upon advertisements the Self-Tapping Website the repair costs of defective construction should extended... Have been swayed arent included state Green and Sustainability claims: a Discussion... Rule Banning Noncompete Agreements- What does it Mean a creature of the habitability of construction.. Contact us via email please click here was no evidence to support assignment...
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