Failure To Disclose Property Defects Could End In Lawsuit

In nearly every state there are rules that state the advice real estate sellers proffer to buyers includes information regarding defects in the property and home before the closing of the sale. This is usually stated in a form known as a standard disclosure form. This form is not a mere formality. Often home sellers have overlooked or forgotten outstanding defect issues and it should be a concern that an outstanding issue may come to the fore once the sale has been completed.

Home Buyers And New Defects

The build quality and workings of a house do not last forever, and a disclosure form does not represent an assurance issues may not arise in the future. The buyer cannot sue, for example, if there is a problem with rodents or slabs breaking once the sale has been completed. But it is not always apparent when a problem was first known. Failure to disclose cracks in concrete for example, or if there has been an issue with rodents in the past may be grounds for a legal case against the seller should the problem crop up once more later after the closing.

What Defects Sellers Usually Tell Buyers When Utilizing the Disclosure Form

In most states the non-disclosure form is a very lengthy document that needs careful attention when being filled out. It will ask the seller to list the features of the home and property and to give a rating to or describe the condition of each property feature. There may be questions regarding pests, any previous legal troubles regarding the property as well as safety hazards.

If there is an issue or a question not on the list, there is normally an “other” panel where additional information can be entered to proactively disclose any other defects one knows about. It is often better to disclose a little more than a little less as smaller issues are not likely to put off potential purchasers. As the seller of the home you are not obligated to seek problems – just mention those you are aware of.

Failure To Disclose

A lawsuit may be filed by a home buyer when, for example:

• Lied or hid a material defect
• Overlooked mentioning a defect in the disclosures
• Listed a material property feature as in better condition than it was

Note, nondisclosure does not have to be the sole reason a home buyer may bring legal action.  The bottom line is that if you are the seller, DISCLOSE DISCLOSE DISCLOSE and you likely cannot later get sued.

Buyer Challenges

Lawsuits regarding nondisclosure are not terribly common, for example:

• It is not often worth the time and money of the buyer unless there are extensive and costly repairs in the tens of thousands of dollars.
• Insurance claims are far easier to file as issues are often covered by the homeowner’s insurance carrier and policy
• The buyer has to show definitive evidence the seller was actually aware of the hidden issue or latent defects. If something was plainly obvious at the time of inspections, it will be far tougher to sue the seller, because the buyer should have known better by witnessing the defect in person during inspections.

Source: Ilona Bray, J.D. “Selling My House: If I Fail to Disclose Something to Buyers About Its Condition, Will They Sue?” Www.nolo.com, Nolo, 8 Nov. 2018, www.nolo.com/legal-encyclopedia/selling-my-house-if-i-fail-to-disclose-something-to-buyers-about-its-condition-will-they-sue.html.

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Disclaimer: This Post Is Not Legal Advice.

You should not ever depend on an online post for legal advice as the law and codes changes often, information sometimes might not be accurate, there can be exceptions to the rule, and wholesale reliance on such matters could be damaging. Always consult with experienced attorneys for current, effective, and factual legal advice.