Disclosure of Material Defects

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What is a Failure to Disclose?

A major source of litigation recently has been the failure to disclose a material property defect.  These defects can include foundation cracks, roof leaks and termite infestation.  Additionally, the existence of any environmental hazards, easements and zoning violations must also be disclosed.

What is a Material Defect?

Any fact that may have a significant and reasonable impact on the market value of the property is material. 

What is the Duty of a Seller?

A seller can be liable for damages if he does not make a proper disclosure.  The seller: 

What is the Duty of the Buyer?

A seller can only be held liable for failing to disclose if the buyer exercised reasonable diligence when inspecting the condition of the residence.  This can include the hiring of a contractor to inspect the premises. 

A buyer cannot later sue for material defects that he should have identified during a preliminary inspection or he knew about before the completion of the sales transaction

What is the Duty of a Broker?

Like the buyer and seller, a broker also has obligations.  A broker: 

Tips for Sellers to Prevent a Dispute of Failure to Disclose 

What Should I Do if I Have Discovered the Property Has a Material Defect?

Real estate transactions are very complex and laws vary from state to state.  An experienced real estate attorney can help you understand exactly what kind of defects must be disclosed.  A real estate lawyer can also represent you in court. 

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Last Modified: 08-24-2015 09:04 PM PDT

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