Not many homes are in perfect condition at the time of purchase. Some imperfections may be obvious, like a crack in the tile, while others may have been disclosed to you before the sale by the seller or the home inspector. The seller may agree to fix some of these issues, but who’s responsible for the repairs if you find problems with a house after buying it?
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Most states have laws that require sellers to advise buyers of certain defects in the property. If you find problems with your home after you move in, you may be within your rights to take legal action. Here’s what you should know:
— Home seller disclosure law.
— What happens if problems are found after closing?
— Can I sue for nondisclosure?
— You need to show proof.
— Dealing with home defects after purchase.
Home Seller Disclosure Law
Most states require sellers to disclose known defects with the property to the prospective buyer in the seller’s disclosure statement. “A home seller disclosure law is a law that requires home sellers to disclose or reveal known defects regarding the property that is being sold,” says Nathan Serr, attorney at Wagner, Falconer & Judd, a LegalShield provider law firm in Minneapolis. “Every state has its own unique disclosure laws and timelines. Many states also require a specific disclosure form, which should be provided by your Realtor.”
According to the law, sellers must disclose material defects, which Serr says is anything that has an impact on the home’s value or safety. These include, but are not limited to:
— Water or flood damage.
— Leaking roof or ceiling.
— Foundation cracks or issues.
— Structural problems.
— Insect or rodent infestations.
— Toxic conditions such as asbestos, mold and lead paint.
— Mechanical issues with the HVAC system.
— Death on the property in recent years.
— Electrical issues.
— Zoning issues or proposed changes to zoning.
— Property line disputes (dependent on the state).
— Naturally hazardous conditions (located in a flood zone or near an earthquake fault line, tree roots impeding the plumbing lines, etc.).
“Most contracts will have an ‘as-is’ clause and allow buyers a final walkthrough before closing,” says Ryan Milo, associate broker at Inked Michigan Realty, part of eXp Realty in Detroit. “Doing so allows the buyer one last chance to make sure everything is the way it’s supposed to be.”
Even if the seller fixed a material defect before putting the house up for sale, it should be included in the disclosure statement to avoid misrepresentation, negligence or fraud claim, Serr adds. “Sometimes home issues that are repaired or fixed are perpetual problems,” he says. “When in doubt, disclose.”
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What Happens if Problems Are Found After Closing?
If problems come to light after closing, it’s up to the new homeowner to find out if the seller, the seller’s agent or the home inspector should have mentioned it beforehand. “The buyer may have a claim against a seller when it can be proven that the seller knew about the defect and intentionally failed to disclose it,” Serr says. Otherwise, the buyer may be responsible for any new issues that arise after buying the property.
Milo says problems can happen after closing whether you’re buying a brand-new or existing home. “What I tell buyers at the time of signing a contract is that after they get the keys, the house is theirs and things will happen,” he says. “For example, your hot water heater breaks down three days after you move in. … ‘It’s your hot water heater,’ I tell them. This may sound harsh but spelling this out before closing avoids a lot of headaches later.”
This is why it can be extremely difficult to go after a seller after closing and try to prove that they purposely did not disclose defects.
“If I as a real estate broker believed it was the fault of a seller maliciously not disclosing a latent defect, then we ask the purchaser to contact their attorney,” Milo says. “Buyers should outweigh the costs and time with their attorneys to see if there would be a favorable outcome or not.”
Can I Sue for Nondisclosure?
If you can prove that the seller knew about the defect and deliberately withheld this information, you may have legal options.
“Typically, this must be something that existed prior to the buyer taking possession of the home, a defect that is not obvious or visible to the buyer and there is monetary damage resulting from the defect,” Serr explains. This means the buyer has out-of-pocket costs to fix or repair the issue.
You could also send a demand letter to the responsible party and demand that they cover the cost of repairs or request mediation. If all else fails, you could consider filing a lawsuit if you have enough evidence to back up your claim.
“The value of the claim is typically the cost to repair the defect. In some cases, there may be an attorney’s fees provision in the purchase contract,” Serr says.
You Need to Show Proof
It can be difficult to prove that someone knowingly sold you a dump. This is why many real estate agents will urge homeowners to get a home inspection or purchase a home warranty that covers unknown defects.
But if you do decide to bring it to court, be prepared to build your case.
First, you need to determine all responsible parties, which could include the seller, the seller’s real estate agent or home inspector. In some states, the real estate agent could be held liable for failing to disclose known defects. The home inspector could also be to blame if they missed problems that an expert should have seen.
You may be able to make your case if you can prove the problem was there before closing on the home, it was an obvious defect, you weren’t told about the defect or you were lied to, you relied on the nondisclosures or the defect resulted in monetary damages.
If — or when — you do decide to file a lawsuit against the responsible parties, you could potentially sue based on:
— Breach of contract.
— Breach of warranty.
— Failure to disclose.
— Negligence or negligent misrepresentation.
— Fraud.
Before taking action, make sure you are within the statutes of limitations. This puts a limit on how long you have to sue someone from the date of the alleged offense. Every state is different, but most are between two and 10 years depending on what type of claim you have.
Dealing With Home Defects
If your home starts falling apart after purchase, some systems may be covered under warranty — either a manufacturer’s warranty or if you or the seller purchased a home warranty. “Buyers may opt for a home warranty,” Milo says. “These can be paid for by the buyer or seller and typically will run for one year. There are limitations to each repair and most homeowners will have to pay an initial fee for each claim, typically running up to one hundred dollars.”
You can also check with your homeowners insurance policy, which covers a variety of problems, like bursting pipes or fire damage. When shopping for insurance, Milo says that most insurance agencies or underwriters will have access to whether the home has had an insurance claim in the past.
But the best thing you can do before buying a home is your due diligence. Serr recommends investing in a thorough home inspection by a qualified professional who can reveal any issues. Milo adds that reputable inspectors should check all major components — structural and mechanical — and be sure there are add-ons that buyer should consider depending on their location, like tests for radon and certain pests as well as sewer scopes.
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Milo also recommends reading the entire disclosure, cross-referencing any defects that were found during your due diligence and following up with any questions to the seller that you may have.
“Buying a home is a large investment, and you should take the time to understand what you are buying, and the contract you are signing. It’s worth hiring a competent real estate agent or attorney to review the documents regarding the sale,” Serr advises. “Homeowner disputes can be lengthy and costly, so if you notice any red flags regarding the property, purchase agreement or disclosure, ask your Realtor to ask the seller additional questions, and ask for them in writing.”
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What to Do When You Bought a Home With Problems Not Disclosed originally appeared on usnews.com
