Usually with real estate transactions, the onus is on the buyer to make sure that the home they are purchasing lives up to their expectations. However, when the property has a serious flaw, exceptions exist to protect homebuyers. When the flaw is knowingly concealed by the seller, most states allow homebuyers to seek fair remediation from the seller, sometimes even after the transaction has been finalized.
In many cases, homebuyers have no recourse for a problem they discover after the transaction is settled. However, when the problem is a serious home defect that the seller knew about, the buyer may have a legal right to hold the seller accountable.
Whether the buyer purchased the house from a private homeowner or a builder, they have the right to sue if the seller deliberately failed to disclose a major defect in the property. Homeowners who attempt to keep defects hidden can be sued for not disclosing or intentionally obscuring problems from the buyer. Homebuilders are held to a different standard under what is called the implied warranty of fitness, which requires that builders ensure that the home is suitable for occupants to live there.
What are Common Hidden Defects?
Home defects that sellers commonly leave undisclosed to buyers include:
- Foundation cracks
- Septic system trouble
- Dangerous electrical issues
- Damaged or decaying sewer lines
- HVAC problems
- Radon leaks
- Toxic mold
- Roof leaks or danger
- Trouble with the plumbing system
- Rusty pipes
- Water damage
- Rotted wood
- Driveway integrity problems
- Termites or other pest damage
- Problems with windows or ventilation
What Issues Must be Disclosed by Homebuilders?
Homebuilders have a duty to make buyers aware of structural issues or other factors that may compromise the integrity of the home and make it unfit to live in. These include construction defects caused by failures in the design, planning, execution, or inspection of the property that do not meet reasonable standards. Some common construction defects include:
- Unstable foundations
- Structural issues
- Problems with concrete or masonry work
- Poor structural carpentry
- Thermal protection
- Doors and windows
- Mechanical or electrical issues
- Subsurface or soil problems
- Water leaks or water damage
What are Sellers Required by Law to Disclose?
Most states require sellers to disclose all material defects of the property. If the seller refuses to list them or leaves something out, the validity of the sale may be compromised. If the problem comes to light in time, the buyer will have the right to pull out of the sale before it is finalized without suffering any consequences for breach of contract.
What is a Material Defect?
A material defect in a home is one that affects the home’s value and may cause danger to people. The International Association of Certified Home Inspectors classifies material defects as having one or more of the following elements:
- It involves a specific issue with a system or component of a residential property.
- It may have a significant, adverse impact on the property’s value.
- It poses an unreasonable risk to people.
What is a Real Estate Disclosure?
A real estate disclosure, or a disclosure letter, is a written document in which the seller lays out the issues that might negatively affect the value of the property. This should be executed prior to the sale.
What is the Role of the Home Inspector?
A potential homebuyer should hire a home inspector to do a full inspection of the property and complete a comprehensive report that gives the buyer a full picture of the condition of the property. Home inspectors typically check items off an exhaustive list that extends from the roof and gutters to the furnace in the basement and everything in between.
Is the Homeowner Required to Fix Problems?
Neither the seller nor the buyer are under any legal obligation to fix any problems found by the home inspector. However, any serious problems may be grounds for renege on the deal. If the issue is substantial, the buyer will be able to get out of the agreement without being in breach of contract. On the other hand, the buyer may simply request that the seller reconsider the purchase price or find some other concession to entice the buyer.
What is a Demand Letter?
When a homeowner finds a defect after they purchase a home, they can send a demand letter to straighten matters out without resorting to a lawsuit. A demand letter is used to explain what is wrong with the property and what should be done to fix it. The homebuyer can send a demand letter to notify the seller what they expect in terms of repairs or compensation to settle the dispute.
Can Other Parties be Liable for Defects?
Besides the seller, other individuals may be in a position to conceal defects that could otherwise imperil the sale. Liability for failing to disclose such things may fall on a real estate broker, the home inspector, or either the seller’s or buyer’s real estate agent.
To determine who is responsible for the defect, the homebuyer should speak to a lawyer who handles real estate litigation. A lawyer will advise on the best course of action.
Towson Real Estate Lawyers at Huesman, Jones & Miles, LLC Help Homebuyers Pursue Contract Litigation
If you are a homebuyer who has discovered a defect in a property you are under contract to buy, you may be able to hold the seller accountable. If you have concerns about the real estate transaction, a Towson real estate lawyer at Huesman, Jones & Miles, LLC can help. Contact us online or call us at 443-589-0150 to set up a free consultation to discuss your case. Based in Hunt Valley and Towson, Maryland, we serve clients throughout Baltimore, Baltimore County, Bel Air, Bentley Springs, Columbia, Freeland, Hereford, Hampton, Westminster, Essex, Monkton, Sparks Glencoe, Parkton, Phoenix, Pikesville, White Hall, Carroll County, Harford County, and Howard County.