Almost every single home buyer should be cautious of failure to disclose issues. Failure to disclose generally refers to the sellers failure to disclose material defects with the property. When sellers fail to disclose they will be held liable for damages sustained by the buyer. It is important to make sure you know your rights. Below we discuss some of your rights and the duties of sellers with regards to the sale of any residential real property.
Sellers Duty to Disclose?
When you purchase any piece of real estate the seller is required to duly inform you of known defects with the property. When sellers fail to meet this duty they will be in breach of their contractual obligation of good faith and fair dealing.
The law states that any seller of real property is required to disclose material defects with the property. What is considered a material defect? Material defects can be different with every purchase. A material defect is generally one that would otherwise change the buyers opinion about the purchase. In other words the buyer would not complete the transaction had they known of this issue. These defects are judged under a reasonable subjective standard. So long as the buyer would not complete the purchase then the defect would be considered material.
Buyers who purchase a home and later discover these defects will be required to make any such disclosures if they decide to re-sell the property. However, many times subsequent buyers will request significant discounts or refuse to purchase the property at all if the defects are serious. In such cases buyers are left with an asset that they will have to deeply discount in order to sell. As a result they suffer substantial losses. It is important that you bring these issues to the sellers attention immediately in order to protect your statutory filing deadline.
Real Estate Broker Liability
In certain cases real estate agents or brokers are held liable to the same extent of the seller. By statute real estate brokers owe a duty of care to prospective buyers of real property. Real estate brokers are charged with an affirmative duty to make a reasonable inspection of the property and to disclose facts which affect the value of the property.
If the agent fails to make these disclosures they will be held liable for negligence or in some cases fraud. The standard of care applicable to real estate agents is one with similar experience and education. While they are not required to inspect the entire property, they are required to inspect areas that are reasonably available for inspection.
In the event that there is non-disclosure or failure to inspect by real estate agents, then you have 2 years from the date of possession to bring a cause of action. This statutory time period sets the time limit, which you have in order to bring a cause of action against your broker or agent for failure to disclose.
What If I Bought the Property As Is?
Many sellers think that an “as is” clause will limit their liability, but that is not the case. It is almost impossible to contract yourself out of non-disclosure of material defects. This would be comparable to a doctor contracting themselves out of malpractice.
Sellers should be aware that a “as is” clause does not limit or absolve them of liability for non-disclosure issues. Buyers should also take note that a simple “as is” clause will not limit their rights. In fact buyers will almost always be able to pierce through this clause and move forward with any claim for damages.
It is important to remember that certain timely and statutory deadlines must be satisfied. You should act promptly to secure your rights and move swiftly to avoid missing any statutory deadlines for filing your case. Generally you have up-to four years to bring a cause of action, but this time period can be different from state to state. Additionally this time period can be further reduced depending on the cause of action.
Summary of resolving mold real Estate transactions.
Identification of mold in a home by an inspector or appraiser in your real estate transaction is at least a bump in the road, but potentially a deal killer, so it’s important to know what to do.
It’s always a good idea to have your appraisals and inspections done asap to be able to address ANY issue that comes up, especially mold.
Once identified, call a professional IMMEDIATELY to analyze the cause of the moisture and to develop a plan of action to solve the moisture problem and remediate the mold.
All too often, we get a call at the last minute from a realtor who has a transaction that is ready to close, but mold was identified. Sometimes it’s a minor fix, but all too often what is thought to be a minor mold problem is a structural problem causing high moisture levels and the mold remediation requires demolition and reconstruction. The sooner this scenario is identified, the sooner it can be resolved.
Also it’s important to understand what the requested outcome is. Is it the lender requiring that the mold be remediated and a certification by the remediator? Is a mold test required after remediation? How is the cause of the moisture to be addressed?
That’s why it’s so important to work with someone who is experienced in real estate transactions, to help solve the issue to everyone’s satisfaction and to prevent future problems.
Give Mold Remediation Pros a call and we will be glad to work with you on any mold remediation problems during your real estate transaction.