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What happens if your home seller fails to disclose a defect?

On Behalf of | Apr 19, 2023 | Real Estate Law

Buying a new property is both an accomplishment and a huge responsibility. To ensure they are getting their money’s worth, buyers meticulously look into the details of the properties they are interested in, such as the available amenities, neighborhood and possible defects. But what if the seller conceals or lies about a defect?

Obligation to disclose

Under Maryland’s real estate laws, a residential property seller must disclose its condition, including all defects, to potential buyers. This covers material defects or improvements that the buyer would not reasonably expect or discover through visual inspection and would pose a risk to their health and safety. This information shall be written in a disclosure statement and given to the buyer.

However, the law only requires sellers to disclose information they actually and personally know of. There are exceptions to this rule such as if the property has never been occupied or the sale is due to foreclosure.

Prior to closing

If the buyer finds out about the concealment or misrepresentation before closing the purchase agreement, they can cancel it due to breach of contract. The buyer can also attempt to request the seller to cover the cost of repairs if they choose to continue with the purchase.

Can you sue the seller?

If the seller intentionally withholds or misreports information on the disclosure statement, the buyer can file a lawsuit for fraud or misrepresentation. The buyer has the burden to prove to the court that the seller personally knows of the defect and that they intentionally concealed the fact.

While it is difficult to prove fraud and misrepresentation, it is not impossible. It is important for the buyer to thoroughly investigate by reviewing records and speaking with people within the property that may know about the issues.