It is as important now, as it has ever been, to carefully read each and every detail of any contract that one signs, especially with respect to buying a home or purchasing any other type of real estate. The financial burden involved with such transactions is most likely quite large and life changing for many.
No less important than reading understanding all parts of a real estate sales agreement is the need to be up front with the other party to the transaction about the condition of the property, especially as to a problem that is not visibly obvious.
As an example, here is a brief description of a case in which an expensive lesson was learned by the seller of a home – one who was less than completely forthright in notifying the buyer about the defects within the home’s basement wall.
During the litigation that ensued as the buyer sued the seller for negligent misrepresentation and fraud, the buyer testified that he was initially quite impressed with the finished basement of the home. It had new drywall on the walls and a smooth polished floor. Unfortunately, within just a few months after moving in, the buyer noticed moisture and water leaking from under one of the basement walls. Removal of the drywall to investigate the source of the wetness – workers exposed a basement wall that had multiple cracks and was bowed. There was evident mold and mildew present, which can often be very dangerous to human health. There was also evidence that suggested some haphazard repair was made prior, as there were layers of caulking in some of the cracks and crevices. The final repairs were made by the new owner and hired help – but at a hefty expense.
Even though the seller of the home had responded with a “no” on the disclosure form regarding any issues, cracks, settling, or known water problems in the basement – the subsequent evidence revealed that the correct and honest answer should have been a “yes”. The seller had also claimed that he put up the new drywall in the basement at a much earlier time before he had begun to consider selling the house. However, records actually showed that there was no drywall put on the walls at the time that the house was initially put on the market the first time – and it did not sell. The new drywall was installed in less than a year later in preparation for the second attempt at selling, in which the buyer was unaware.
Because he did not disclose the truth, the seller eventually had to pay for his lack of honesty. The buyer sought legal guidance and subsequently, an appeals court upheld an award of tens of thousands of dollars in damages. There was compensation to the buyer for the costs he incurred for the repair work and the installation of an exterior drainage system. The buyer also recovered the costs for the installation of multiple straps to repair the bowed wall, the footer drains repaired, and the mental anguish he suffered. The trial court’s conclusion that the seller displayed “conscious disregard” for the safety and the rights of the buyer added an award of significant punitive damages – due to there being such a blatant probability of causing the buyer substantial harm. This case represents a good lesson when selling real estate or any other transaction.
When you buy a condominium, a home, any other type of building, or even vacant land – you must have a complete investigation made on every aspect of the property. The real estate attorneys at The Floyd Law Firm PC will effectively guide you through all of the legal services prior to, or during the negotiation of a contract of sale between the buyer and the seller. We’ll go over the guidelines and standards for agent behavior related to disclosures, the types of facts that are required, and facts to be disclosed.