Legal Topics > Real Estate, Property and Housing > House or Condominium > Purchase and Sale of Residence

Caveat Emptor Laws

Locate a Local Real Estate Lawyer

Caveat Emptor Laws

Real estate and property law involves buying and selling property. Part of the process of buying and selling property involves disclosure, which is the act of the seller revealing any defects the property has, such as electrical problems or water damage. In addition to disclosures from the seller, a buyer has a duty to inspect and research the property they are interested in purchasing. This informs them about any potential defects that may be unknown to the seller. A person who fails to conduct proper research may not have a legal recourse to reverse the real estate transaction.

What Does Caveat Emptor Mean?

Caveat emptor is Latin for “let the buyer beware.” In real estate law, the buyer of a property has the burden of exercising proper care when purchasing real property. This means that it is the buyer’s responsibility to conduct the appropriate research and caution when selecting the property prior to the completion of the sale.

Who Does This Rule Protect?

It protects the seller from liability when a buyer has remorse for making the purchase over something that they failed to notice simply because they did not make any effort look at the property before buying it.

Does This Rule Apply to New Home Purchases?

Typically, caveat emptor applies only to forced sales, “as is” sales, and sheriff’s sales. Whether the rule of law also applies to new home purchases depends on the jurisdiction.

Does a Seller Have to Inform Me If a Property Is Stigmatized?

No, unless it will noticeably affect the value of the property. A stigmatized property is a real estate where something normally considered unpleasant occurred, such as:

Suicide
Murder
Cult activity
Phenomena
Criminal activity
Sex offender lived in the residence
The previous owner had AIDS/HIV

Is It Possible for Caveat Emptor to Not Apply?

Yes. A seller does have a duty to truthfully disclose important facts pertaining to the property. Any time the seller lies or misrepresents facts about a property, then caveat emptor no longer applies.