Legal obligation to report hidden & latent defects
A seller that fails to report a hidden defect could face legal recourse
Your legal obligation to report a hidden and latent defects. You just bought your first home and feel pretty good about the purchase. At some point in the immediate future, you discover that the property is not all it was represented to be. In fact, you discover that the home has a hidden defect that diminishes the value and usefulness of the property. How should you proceed?
What is Considered a Hidden Defect?
Before moving forward to discuss the responsibility for reporting a hidden defect, it seems prudent to define what would be generally accepted as a hidden defect.
When the property is inspected by a potential buyer and or any other representative hired to inspect the property, there will be certain defects that are quite obvious. If there is a crack in the foundation or walls, it will be fairly obvious. There could well be defects that the seller and or their representative openly disclose. Obviously, an openly visual or reported defect is not being hidden.
Two things need to be true for a defect to qualify as a hidden defect. First, the defect has to be one that is not obvious to the naked eye. Second, it must be reasonable to assume that the seller and or their representative knew about the defect and intentionally neglected to disclose it.
The hidden defect itself has to render the property “unfit” for its intended use or diminish the property’s value and usefulness.
How to Proceed If You Find What You Believe is a Hidden Defect
Based on the hidden defect law, you are required to proceed in a reasonable manner when disclosing the hidden defect to the seller and or their representative. By informing said parties in writing that you are now aware of the possible hidden defect, it gives them a reasonable opportunity to acknowledge the problem and have it fixed.
By the way, you as the buyer have no obligation to take extraordinary steps to identify potential defects. Should you decide to hire an inspector to inspect the property, a prudent thing to do, the inspector is only obligated to perform a visual inspection. It is not reasonable for anyone to expect them to cover the property with a fine-tooth comb.
Should the seller and or their representative refuse to acknowledge the problem, you have the burden to prove there is actually a hidden defect. Once you are able to do that, the seller and or their representative will need to provide proof they did not know about or attempt to hide the existence of the defect.
Should the seller and or their representative try to avoid responsibility, you then have the basis for legal action. Should the case end up in front of a judge, the judge will assess whether or not a reasonable buyer would have noticed the defect prior to buying the property.
The judge will further expect you as the buyer to have behaved in a reasonable manner. This includes properly notifying the seller and or their representative in writing and giving them ample opportunity to rectify the issue in a reasonable and timely manner. You would also need to offer proof that you made every attempt to report a hidden defect as soon as it became apparent to you.
As the buyer, you have a right to assume the property is free from material defects that have not been reported. However, the seller and or their representative could put a clause in the purchase contract that excludes the warranty of quality. They would typically do this by including language such as “the property is being sold as-is.” If you were to agree to this kind of exclusion, the seller is essentially indemnified against future legal actions.
Why You Should Hire a Real Estate Attorney Experienced with Hidden Defect Cases
Assuming you have taken the steps mentioned above, your final recourse would be to sue the seller in court. For the protection of your interests, you really do need to hire a real estate lawyer and/or hidden defect lawyer as your representative. In fact, you would greatly benefit from hiring an attorney who specializes in such cases, something we can provide you.
As you can see from the above information, you do have responsibilities when it comes to you properly dealing with this kind of legal matter. A good real estate attorney will be able to make sure you have properly dotted all the I’s and crossed all of the T’s. As your representative in the courtroom, they will understand the rules and procedures for a hidden defect case. Furthermore, they will have the ability to provide evidence and question witnesses in a manner that could bring you the remedies you deserve.
Assuming the defect existed prior to the purchase of the home, you as the buyer should be entitled to certain remedies. In most cases, a judge would order an annulment of the sale or a reduction in the selling price equal to the price of rectifying the hidden defect. Also, you do have the right to request additional damages if you have proof that the buyer intentionally hid the defects from your knowledge.
As you can see, dealing with a hidden defect case is complicated. In order to get the outcome you deserve, you need good representation from a real estate attorney with experience. For more information on how to proceed with a hidden defect lawsuit, we encourage you to call one of our representatives as soon as possible. There are benefits to addressing such as case as soon as reasonably possible.
NOTE: This article does not constitute legal advice from or legal opinion. It is only used to inform readers about certain aspects of real estate law.