Understanding Seller Disclosure Law
Ask the Real Estate Lawyer: Real Estate Law Q&A
REM #LAW 712
By Ilyce R. Glink and Samuel J. Tamkin
Summary: After buying a new home, a ThinkGlink
reader discovers the seller lied about defects to the home. Ilyce and Sam explain
seller diclosure law and how this buyer may still have some recourse.
Q: If you believe the seller lied on the home sale disclosure form, how long
after you purchase a house do you have to pursue your legal options?
(article continues below useful links)
And, if I turn around now and sell the home -- but disclosed the issue -- can
I still go back after the original seller?
A: Most states have seller disclosure laws requiring the seller to disclose
to buyers know material defects in the home. The language might vary from state
to state and the forms may vary, but the intent is roughly the same –
to give a buyer a fair chance at knowing what the seller knows about his or
her home when it comes down to material defects in the home.
The key issue is to determine what the material defect is. For example, if
the seller knows that the foundation of the home is crumbling and the house
is ready to cave in, that certainly must be disclosed. However, if the home
has a leaky faucet in the kitchen, that probably does not need to be disclosed.
Assuming that your question relates to a material defect you discovered in
the home after closing on it, you would then look to your state laws regarding
these kinds of disclosures.
Some states require a buyer to sue the seller for that failure to disclose
within one year of the closing on the home. If you are willing to do some legwork
and have access to the Internet, you should be able to look up the statute that
talks about the seller disclosure requirements. That law should also state the
time period a buyer has to bring suit against a seller.
Obviously, you can hire an attorney, walk through the issues with her and she
can tell you the time limit you have to bring suit against the seller. She can
also give you some advice whether it’s worthwhile to sue the seller. In
some states, seller disclosure laws allow a buyer to recover attorneys’
fees when pursuing a seller for a faulty disclosure.
If you find that you have the right to sue the seller, you may be able to sue
the seller in small claims court, but you won’t be able to recover “attorneys’
fees” in that case for your own time. You generally can only get those
fees reimbursed when you actually hire an attorney and that attorney actively
participates in the case.
If you have resold the home and took a loss because of the disclosure issue,
you may still be entitled to compensation from the original seller. Seller disclosure
laws were not drafted to force a buyer to have to choose between suing the seller
and holding on to the home or selling the home.
The idea behind seller disclosure laws is to provide buyers with an opportunity
to learn from the seller about material defects in the home before buying the
home. Furthermore, if the seller failed to disclose something and the buyer
found out about the failure before closing, the buyer could walk from the deal.
Once the deal has closed, the laws give the buyers the right to sue the seller
and recover from the seller the cost of fixing the problem.
Samuel J. Tamkin is a Chicago-based real estate attorney. Ilyce
R. Glink’s latest book is 50 Simple Steps You Can Take To Sell Your
Home Faster and For More Money In Any Market. If you have questions for
them, write: Real Estate Matters Syndicate, PO Box 366, Glencoe, IL 60022
or contact them through Ilyce’s website www.thinkglink.com