In most real estate transactions, buyers and sellers work out any issues before they go to closing. However, there are sometimes unusual circumstances in which financial and legal disputes may arise after closing.
Occasionally, people who have already taken possession of a home realize that it is not in the condition they expected. They may uncover significant latent defects that affect the value of the home. In some cases, there may be indications that the seller was aware of those defects previously but failed to disclose them. In such circumstances, a lawsuit might be necessary. Buyers can potentially take legal action against a seller.
What types of latent property issues often only come to light after a buyer takes possession?
Foundation issues
When there are issues with the foundation, the rest of the structure can be vulnerable. In more extreme cases, it may become difficult or impossible to open and close all of the doors and windows. Drywall or plaster may crack. Foundation issues can be very expensive to address and hard to notice, which is why sellers may try to avoid disclosing them to buyers.
Issues with wiring
Buyers often only perform a cursory inspection of a building’s electrical systems. As long as everything works, they may assume that the electrical system is in safe condition. Unfortunately, the wires in the walls may be very old and could pose a fire hazard. Learning that the wires are old, damaged or dangerous could lead to costly repairs. Buyers deserve to know about the condition of the electrical system before they make an offer on the property.
Pest problems
People frequently assume that issues with pests ranging from termites to cockroaches are easy to identify. However, pests can be hard to spot, especially during the daytime and when only accessing a property for brief amounts of time. Pest remediation can potentially cost tens of thousands of dollars in more extreme cases. The presence of pests may be a known issue, but the seller may avoid informing the buyer of the presence of insects, rodents or other pests at the property.
In some scenarios, post-closing defects may lead to compensation through the insurance policy carried by the agent who represented the sellers. They have an obligation to verify the condition of the property and inform the sellers of their legal responsibility to disclose those issues.
Other times, it may be necessary to take legal action against a seller to recover the cost of repairing the damage or the reduction in property value caused by latent defects. Pursuing real estate litigation can potentially help frustrated buyers recoup losses caused by sellers who have failed to make necessary disclosures.