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What happens if I purchase a home with an undisclosed defect?

On Behalf of | Mar 10, 2023 | Real Estate Law

These days, selling a home can be incredibly lucrative. Some sellers will do just about anything to ensure their property sells for a good price. They may even hide defects to encourage buyers to go through with the sale.

Still, buyers are responsible for performing their due diligence before purchasing a home. If a buyer purchases a home with an undisclosed defect, what are their remedies?

Seller disclosures

In general, sellers must disclose any known, material defects in a home to prospective buyers. They usually do so in a document referred to as a “seller’s disclosure statement.”

These defects would include anything known to the seller that would affect the value of the property or the safety of the property. This includes problems that were fixed in the past if the problems are considered perpetual. Some examples of material defects include:

  • Water damage and mold issues
  • Cracks in the ceiling
  • Leaky pipes
  • Cracks in the foundation
  • Infestations
  • Toxins such as asbestos and lead paint
  • Electrical problems
  • Zoning issues or known title defects

Buyers are also normally allowed to examine the home one last time before closing, to make sure it is in the condition it should be in.

Issues discovered after closing

If a buyer discovers problems with a home after closing that were not disclosed, what are their options?

One option is to pursue real estate litigation. To prevail in a lawsuit, the seller must have known that the problem existed prior to the sale and purposely did not to make the problem known to the buyer. If this knowledge and intention on the part of the seller do not exist, the buyer is on the hook for problems with the property post-sale.

Another form of relief may exist in the form of a home warranty. Either buyers or sellers can pay for a home warranty. This warranty can cover repairs needed within the term of the warranty.

Finally, the buyer’s homeowner’s insurance might cover certain damages.

Still, none of this absolves the buyer of performing their due diligence. By getting a professional home inspection, buyers can ensure that they discover problems with the home that could impact whether they will go through with the sale.