For most people, buying a house is the biggest asset decision they have to make. Even if it is the second or third time in their lives, it is still a stressful experience ensuring that the property is what they want and that the seller’s description of it is accurate and truthful.
Finding out after a house has been bought that it has a severe defect that wasn’t disclosed to the buyer before the sale went through is unfortunately not uncommon. Typical examples are:
- termite damage;
- infestation by pests;
- water damage;
- rot;
- foundation problems;
- title defects including boundary disputes that may affect ownership rights.
What can the buyer do in response? This article explores the legal options in Massachusetts.
The seller’s legal obligation to disclose a serious defect in Massachusetts
Massachusetts is not as strict as some states that make it a legal requirement for sellers to let a prospective buyer know in advance of a sale of any serious defect like rot in the woodwork, termites or other pest attacks, title or boundary disputes. In Massachusetts, sellers are only legally obligated to disclose two facts about their properties. These are whether the house had been painted with a lead based paint, or whether lead has been used in the plaster or any other part of the house, and whether the house uses a septic system for waste or if it is connected to the public sewage system.
Buyer beware in Massachusetts!
Massachusetts lets buyers make their own decisions about potential serious problems with any house they are interested in purchasing with the exceptions noted above. Basically, this means that sellers are not obligated to let the seller know, i.e. disclose any serious defects before a sale goes through. This doesn’t mean that sellers are all potentially likely to lie about their properties, or even that most properties have serious problems, but it does mean that the prospective buyer has to be more cautious when pursuing a house for sale in Massachusetts.
Note that the state still makes it illegal for sellers to deliberately lie about a serious problem of which they are aware of or attempt to conceal its existence. This would be regarded as misrepresentation if it can be proven that a sale had been made based on deliberate misinformation given by the seller. As long as the seller keeps quiet about a problem that he or she knows about, however, it makes it difficult for the buyer to pursue legal action after the sale has gone through once the problem has been noticed.
What should a buyer do to reduce the chance of buying a house with a serious defect?
To avoid the problem of dealing with defects after a sale has already gone through, thorough research into the house before signing an agreement is wise. Although sellers do not have to let prospective buyers know of a defect that they know about, they must not lie or provide false information about known defects. This means that the prospective buyer can ask the seller a series of questions about the house which could reveal possible defects. It is best that the questions and responses are recorded in writing so that in the event that it is found that misrepresentation has taken place, the buyer has evidence of an attempt to provide false information.
In most cases, when the seller genuinely responds to questions about the house, any defects can be assessed and the price offered for the house can be re-negotiated if the buyer is still interested in the purchase.
Note that a real estate agent may have already made an agreement with the seller for the seller to complete a disclosure form, even if it is not strictly a legal requirement. A disclosure form helps to absolve the estate agent in the event that the house sale does go through with defects then discovered and the buyer decides to take legal action due to alleged misrepresentation.
Note that the seller may genuinely not know of potential or current serious defects, but the buyer should still take the opportunity to arrange a thorough inspection of the house, including title and boundaries and obtain a realistic assessment of the cost of repairing any defects discovered which can be used to negotiate an adjusted sale price.
Can a new owner sue the seller after a sale has gone through?
The individual who has bought a property and discovered that it has costly defects that weren’t made apparent before the sale may be able to sue the seller if:
- there is evidence that the seller lied or provided false information about defects, i.e. deliberately misrepresented information about the house;
- a lawsuit is filed against the seller within the state’s statute of limitations, which puts a time limit on this type of legal action. For misrepresentation, or fraud, the statute of limitations is three years from the date of discovery of the defect.
If you are in the situation above where you have bought a house with serious defects and have convincing evidence of misrepresentation by the seller, it is advisable to contact a real estate attorney in Boston for legal guidance with Massachusetts misrepresentation laws and whether the evidence you have provides solid grounds for a lawsuit.