Buying a home is one of the most important financial decisions most people make. While homes often require some form of upgrades or replacements, if a home has serious defects, it is the seller's responsibility to disclose this information. Most states have laws requiring sellers to disclose all important material facts about a home, including any known defects. California has some of the most strict requirements for disclosures in real estate transactions. There is specific section on standard California real estate forms where the seller is supposed to make disclosures. When a seller fails to disclose material defects that affect a property's value, this is known as nondisclosure. In these cases, the homebuyer may be entitled to compensation for the defects discovered.
What is considered a material defect?
A material defect is an issue with a residential property that negatively impacts its value or presents a risk to people. Material defects are different from systems that are approaching the end of their normal lifetime. For example, a furnace that currently works but that eventually breaks down after many years of use would not be a material defect. However, drainage or leakage issues, termite damage, a neighbor's encroachment and many other issues would be considered material defects; the seller would be expected to disclose all of these issues upfront. What the inspector is mainly concerned with are these kinds of irregularities that would be classified as material defects.
What to do if you discover the seller failed to properly disclose known defects
If you have discovered defects with your home after the sale has been completed, there are different options available to you. The law applicable in your case is usually dependent on your state. Some states allow the homebuyer to recover monetary compensation for the defects that were discovered, while other states go further, sometimes allowing the homebuyer to rescind the real estate transaction in instances where the defects were especially severe. As laws regarding real estate disclosures and defects vary state to state, it can be useful to consult with a local real estate lawyer for more specific information.
Determining liability: Who is at fault in these cases?
In terms of liability, it is typically the seller who is responsible for disclosing any known defects. However, there are cases in which it is the broker or home inspector's responsibility, and liability in these cases may extend to them. An experienced real estate lawyer can look at your case more closely and offer you advice.
If you have a claim relating to nondisclosure, it is important that you get advice from an experienced real estate litigation attorney. Do not delay. You may be entitled to monetary compensation. We have an experienced team of real estate litigation attorneys who have represented clients in a range of real estate disputes, including those involving nondisclosures. To set up a free consultation to discuss your claim and get advice, contact us at 714-450-6568 or toll free 800-835-2447.
Sources: http://realestate.findlaw.com/buying-a-home/home-defects-discovered-after-the-sale.html; http://realestate.findlaw.com/selling-your-home/required-real-estate-disclosures-when-selling-property.html