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Why buyers may sue if sellers don’t disclose property defects

by | Dec 19, 2023 | Real Estate Practice |

Co-Authored By: Bradley S. Dornish, Esq. and Nathan Morgan

Purchasing a home is a very involved process. It can take weeks of research to find the right property, and buyers may have to compete with many other parties interested in the same home. Typically, buyers need to make their best possible offer when the market is competitive. Even with higher interest rates recently, low inventory of available homes in the Pittsburgh market has kept competition keen.

The offer process usually includes offering a purchase price that reflects what the property is worth in the current market and the fewest conditions a buyer is comfortable offering. To ensure that sales are fair and appropriate, Pennsylvania imposes certain requirements on a party listing residential real property and the agent representing them. Proper disclosure of all major defects with the property is one of the most important responsibilities.

If a seller chooses to hide known issues with the property, the buyer may then decide to take them to court afterward. Why is litigation often the response to hidden property issues?

Defects are often very expensive to correct

Certain issues with the property may be immediately obvious. Uneven floors or cracking plaster will be hard to ignore during a casual walk-through and easy for a professional inspector to identify. Other property issues are much harder to spot, especially if the seller makes a point of trying to hide them. For example, sellers might spackle and paint over cracks in the drywall that would otherwise indicate their property has foundation issues. They might move furniture so that prospective buyers or inspectors will not see problems with their property’s floors or walls. They may even attempt to temporarily repair damage caused by water incursions when permanent fixes, such as full roof replacements, are necessary to fix such incursions.

Latent defects often cost tens of thousands of dollars to repair. They can also cause significant collateral damage to the home and the property inside the building before the buyers uncover the issue. A lawsuit means that buyers can either recoup repair costs and damage-related expenses or request compensation for the diminished resale value of the property.

The decision to list a property in as-is condition will not shield a seller from culpability under Pennsylvania’s Seller Disclosure law. They still have an obligation to provide specific written disclosures about any known issues with the property which are not readily apparent to the buyer or found through a home inspection before sale. A successful lawsuit can force the seller to compensate the buyer or lead to a real estate agent’s professional insurance paying for the cost to repair the defects or the difference in property value they create if the agent knew of the misrepresentation in the disclosure by the seller.

Holding a seller accountable for a property’s undisclosed defects is a reasonable response after buying a home only to discover that it has major undisclosed defects. Those with questions or concerns on this subject may benefit from seeking legal guidance as proactively as possible, especially since Pennsylvania has a two-year statute of limitations for bringing action against sellers for Seller Disclosure violations. This statute of limitations begins from the date of a property’s closing.

There is an even shorter, one-year statute of limitations for filing a suit arising from a faulty home inspection report. This time window begins following the date of the report’s delivery.

For more information on this topic, read Seller Beware of PA’s Disclosure Law, found on our website’s “Articles” tab under the “Litigation Practice” section.

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