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Is the seller or their agent responsible for undisclosed defects?

On Behalf of | Jul 23, 2021 | Property Law

When you recently bought a home, you toured it with your own agent to check it for defects. You probably had an inspection and an appraisal performed on the property. In addition to those efforts, you or your agent likely looked over the disclosure provided by the seller regarding the condition of the property.

For most people, inspection, appraisal and tours will turn up any major issues with the property. However, occasionally, buyers only discover serious defects after they have already closed on the property and taken possession of it.

If neither the seller nor their agent informed you about a defect in the home, which one of them is actually responsible? Is the seller to blame, or do you have a claim against their real estate representative?

Who had knowledge of the defect?

The seller, as someone living at the property, will likely have known about any serious issues with its condition. They may have discussed the problem with neighbors. They may even have talked to construction professionals about making repairs to the property.

If the cost was too high or the repairs too inconvenient, the seller may have chosen to list the property for sale and move instead of making the repairs. Even if they listed the property in as-is condition, they still have an obligation to disclose any defects they know about.

If they painted or otherwise made temporary repairs to cover a defect, you can probably show that the seller knew about the defect. It can be harder to make a claim against their real estate agent.

Some agents actively avoid checking the condition of a property

Real estate agents usually will not help sellers fill out their disclosure. They do this to avoid incurring liability for themselves and any broker involved in the transaction. Once an agent knows about a defect, they have a legal obligation to report it.

By having the sellers fill out the paperwork on their own and making only cursory inspections of the property, agents can try to avoid responsibility for any defects in the properties they sell. However, if the buyer claims that the agent was the one who told them to make the repairs to the defect, that might put you in a position to make a claim against the agents or their professional insurance.

When you have a dispute regarding your property, it’s important to explore all forms of available recourse to maximize what compensation you receive.