Home Buyers’ Rights

The home purchase process can be extremely exciting and emotionally difficult at the same time. There are many variables which may come into play during a home purchase, such as:

• The price of the home;
• Whether the buyer can be approved for the mortgage;
• Whether the seller will accept an offer; and
• Whether there are any issues with the home.

In most cases, purchasing a home is a life-changing experience and one of those largest purchases an individual will make in their lifetime. It is important to be aware of an individual’s rights as a buyer so they can enjoy the home buying process.

There are numerous consumer rights when buying a house that an individual is entitled to. These rights may also be referred to as home buyers’ rights. 

In a home purchase or sale transaction, a buyer has rights under both state and federal laws. These rights may vary depending on certain factors. 

In general, however, a home buyers’ rights may include:

• The right to be free from housing discrimination during the home buying process, which  is governed mainly by the Fair Housing Act;
• The right to be informed of any encumbrances on the title, which may include a lien, easement, and other issues;
• The right to a disclosure of any defects or safety dangers, such as: 
  • waste management; 
  • water supply; 
  • insulation; 
  • hazardous materials, such as lead paint; and 
  • other issues;
• The right to choose or refuse a mortgage provider or lender;
• The right to know about property taxes affecting the property, including from previous years;
• Rights related to homeowner’s insurance, title insurance, and other forms of insurance;
• Rights to have the property appraised in a fair and neutral manner;
• The right to obtain a market price analysis and comparison with other similar properties;
• The right to obtain a copy of a the Purchase and Sales Agreement prior to closing;
• The right to a walk-through of the property before closing; and
• The right to review the Settlement Statement at closing.

What are Some Examples of Violations of Home Buyers’ Rights?

As noted above, buyers have numerous rights during the purchase process. Because of the numerous rights, there are many examples of violations of home buyers’ rights.

There are both state and federal laws which prohibit denial of housing based on certain characteristics, or protected classes. These protected classes include:

• Race;
• National origin;
• Color;
• Religion;
• Sex;
• Age;
• Disability, whether physical or mental; and
• Pregnancy.

Discrimination based on these characteristics is prohibited during housing related activities, such as:

• Renting;
• Purchasing; and
• Lending. 

In addition, a tenant cannot be selected based upon their marital status or their familial status, including having or not having children. An example may be if a potential tenant visits an apartment complex where signs state there are units available but, because of their religious clothing or skin color, are told there are, in fact, no units available. 

This type of housing issue is mainly governed by the Fair Housing Act, a part of the Civil Rights Act of 1968, which prohibits discrimination during the sale, rental, or financing of a residence. The FHA currently applies to:

• The sale or rental of real estate;
• Advertising for real estate;
• Providing financial assistance for renters or buyers of real estate;
• Brokering or appraising real estate;
• Participating in real estate organizations;
• Intimidating, coercing, or threatening individuals in regards to their purchase or rental; and
• Interfering with an individual’s right of enjoyment and use of housing rights based on discriminatory reasons.

The FHA also prohibits:

• Engaging in mortgage lending discrimination;
• Harassing individuals based on their protected class;
• Interference with any individual who is exercising their FHA rights; and
• Retaliation against an individual who has filed a fair housing complaint, or assists in the investigation of a fair housing complaint.

If an individual feels they have been discriminated against, they can file a complaint with the Office of Fair Housing and Equal Opportunity (FHEO), which is a part of the Department of Housing and Urban Development (“HUD”).

What if My Rights as a Buyer Have Been Violated?

A violation of a home buyers’ rights may lead to various legal consequences. These may include issues related to:

• A breach of contract;
• Real estate broker liability;
• Home seller liability; and
• Other issues.

In many cases, a damages award may be issued by a court in order to compensate a buyer for their losses related to the violation. For example, if the failure to disclose a defect with the residence causes a buyer to lose money on the purchase, the buyer may be awarded damages to compensate for those losses. 

A real estate broker may also face breach of contract issues related to a home purchase. In addition to the requirements of their licensing board, a real estate broker is required to:

• Keep client matters confidential, such as the lowest offer their client will take during negotiations, unless their client authorizes disclosure;
• Remain loyal to the client and avoid conflicts of interest;
• Disclose all relevant issues, like any factor that would affect the property value;
• Act with care during the transaction, for example, performing a diligent investigation about defects with the property;
• Safeguard any valuable documents or money which the broker comes into possession of during the transaction; and
• Fulfill the terms of the broker agreement or any other contract with the client.

If a real estate broker fails to fulfill their duties, it may lead to a breach of contract or other type of civil lawsuit. A broker may be required to compensate the client or an opposing party if their actions caused damages. A breach of their fiduciary duties to the client may result in license suspension, termination, or even the loss of a brokerage firm.

A buyers’ rights violation may also, in some cases, lead to other types of liability. For example, criminal liability may exist in a fraud case.

What are Some Remedies for a Violation of Home Buyers’ Rights?

There are several possible remedies for a violation of home buyers’ rights, depending on the circumstances of the violation. If the violation is a breach of contract issue, the home buyer may exercise one of the following remedies:

• Request monetary compensation for the breach of contract;
• Terminate the contract and request a refund of their deposit as well as covering reasonable expenses; and
• Specific performance, which means that the seller is forced to complete the sale.

As noted above, fraud related to a real estate purchase may lead to criminal charges. Real estate fraud may be charged as a misdemeanor or as a felony. In some cases, real estate fraud can also be charged as a federal crime by federal authorities.

Do I Need a Lawyer for Help with Home Buyers’ Rights?

Yes, it is essential to have the assistance of a real estate lawyer for any issues you may have related to home buyers’ rights. A home buyer is entitled to certain rights in a home sales transaction.

A real estate attorney can provide you with assistance with many home purchase issues. Your attorney can also provide legal advice and guidance from the start of the home buying process to its conclusion. In the event a legal dispute arises based on a violation of home buyers’ rights, your attorney can help you file a lawsuit and represent you any time you are required to appear in court.