Failure to disclose defects in real estate is a serious issue. Former property owners and sometimes even real estate agents can be held responsible for failure to disclose defects that exist in a home.
Sometimes, the misrepresentation is innocent. Often, it’s negligent. Other times, failure to disclose defects is completely deliberate.
When sellers or listing agents show a reckless disregard for the truth in a real estate transaction, the new property owner may have a very good misrepresentation claim. Listing agents are supposed to have the seller disclose all material defects with the home and property to the home buyer.
Across the country, statutes and court decisions make it clear that real estate sellers should inform buyers of certain defects prior to closing. When they don’t, litigation is often an option.
Typical disclosure forms will ask about the condition of various important features of a home. They may also ask about issues like pests, environmental hazards, mold, ongoing property disputes, and more. While a seller isn’t required to proactively look for potential problems with the home they are selling, they shouldn’t actively cover known problems up without disclosing those problems either.
Legitimate Reasons for a Failure to Disclose Defects Claim
There are a variety of reasons why a new homeowner may have reason to sue over failure to disclose defects in a home or commercial building. Some reasons include:
- Seller rated a feature in much better condition than it is
- Seller hid a material defect
- Seller knowingly failed to disclose a material defect
It’s not just the seller’s responsibility either. California statutes, for example, say that real estate agents and brokers have a duty to disclose defects they know about too.
Responsible parties may have to pay compensatory and/or punitive damages. In some less common cases, the buyer may even get the opportunity to rescind the purchase entirely. Your best chance of recovering damages is with an experienced real estate attorney.
Common Issues Named in Failure to Disclose Defects Lawsuits
Disclosure of defect requirements vary by state, but there are several common reasons real estate attorneys choose to take on a failure to disclose defects case. Examples of reasons for failure to disclose defects lawsuits include the seller’s or listing agent’s knowledge of:
- Termites
- Plumbing problems
- Water leaks
- Electrical issues
- Existing boundary disputes
- Structural problems
- Foundation damage
- Environmental hazards
If you win your case in Texas, you could be entitled to damages under the Texas Deceptive Trade – Consumer Protection Act, the Statutory Fraud Act, or even a common law claim for fraud or misrepresentation. In many cases it’s easier to recover damages under the Statutory Fraud Act, because it puts the liability on the person who misrepresented without always needing extensive proof that they intended to deceive.
Selling “As Is” Is Not a Free Pass to Keeping Secrets
If you purchased a home that was being sold “as is,” you may still have a case worth litigating if the seller fraudulently concealed defects in the home you bought from them.
While some Texas sellers have begun to add in provisions that expressly waive all fraudulent inducement claims, if your contract did not include that provision, you have a right to sue in Texas for failure to disclose. When you buy a home “as is,” you expect that it will have issues. But you don’t expect to expose yourself to a fraud.
When you purchase a home or commercial real estate, the seller and listing agent do not have a right to lie to you about a major problem with the property, nor do they have a right to deliberately cover up a serious defect.
Find an Experienced Real Estate Attorney Who Is Not Intimidated by Litigation
LloydWinter, P.C. has offices in California and Texas, and we are well-versed in failure to disclose defects litigation. We stand by our clients in failure to disclose defects claims throughout the entire process, including aggressively pursuing damages through litigation.
No one should be able to con you into buying property by covering up major defects. That is immoral and illegal.
Our experienced legal teams have the competence and conviction to fight for your best interests in court. We will help you recover the maximum in financial damages available under Texas or California law.