U.S. home prices are at record highs. In March, the median price showed a year-over-year increase of 15%, reaching $375,300. So, if you bought a home recently, you must have paid a good sum for it. You now have a hefty financial commitment if you purchased it with a mortgage. So, if you discover a major defect that requires expensive repair, it is understandable if you want to get a real estate lawyer and sue.
But first, find out if you have grounds for suing.
Minor defects and buyer’s regret don’t count. If you’ve been living in the house a long time, especially if it was already old when you bought it, you might not be able to sue for normal deterioration due to age. If the defects were evident when you did a house tour, but you disregarded them, you cannot sue.
Suing the seller also isn’t an option if they told you beforehand about the issues verbally or in writing.
Moreover, you must prove that the defect already existed before you bought the house. Otherwise, you have no grounds to sue. Finally, find out whether you’re still within your state’s statutes of limitation.
As a client-oriented law firm in New York City, Aminov Law Group, P.C. helps you determine the next step if you’re dealing with real estate issues after buying the property.
Seller’s Disclosure Law
Several states have laws that require home sellers to disclose home defects to a buyer. In New York, the Property Condition Disclosure Act (PCDA) mandates this. The PCDA covers single-family to four-family residences but not cooperative apartments and condominium units.
The New York Department of State website has a copy of the standard seller’s disclosure statement. It covers information on:
- Property age
- History of possession and current ownership
- Utilities and utility surcharges
- Water source and quality
- Location hazards, such as being in a flood-prone area or near a landfill
- Toxic hazards, such as the presence of lead, asbestos, radon, petroleum, and the like
- History of issues and repairs, including structural problems
- Water damage
- Damage from fire and smoke
- Insect damage
- Plumbing, drainage, sewers, and other systems
- Deaths that occurred in the home
- Homeowners’ association rules
- Neighborhood nuisances
- Items missing from the home
- Miscellaneous information, such as if the property is in a historic district and under historical preservation rules
If the seller’s disclosure should have included the problem you discovered but failed to, you have grounds for suing. With the help of your real estate lawyer, you must prove that the seller had previous knowledge of the defect and willfully withheld the information.
You may have a stronger case if you can prove that the seller actively hid the defect.
Lead Hazard Disclosure
For homes built before 1978, the Residential Lead-Based Paint Hazard Reduction Act of 1992 requires sellers in any state to disclose the known presence of lead-based paint on the property. The sales contract must also include a warning about the lead hazard.
Additionally, the seller must provide the buyer with the specified EPA pamphlet and give them ten days to test the home for any remaining presence of lead. Afterward, all parties involved in the transaction must sign a statement that all requirements were complied with.
If you find lead in the home after purchase and the seller did not disclose it, you have grounds to sue. Again, you must have solid evidence that the seller knew about it.
Real Estate Agents
In New York, real estate agents are not required to inspect the property for defects to disclose to the buyer. However, agents must inform the buyer about the PCDA and the need for a seller’s disclosure statement. If your agent did not tell you about this, resulting in the lack of a disclosure statement and you not knowing about the property defect, you can sue the agent for violating the PCDA.
Agents are also required under New York real estate law to inform the buyer of any known misrepresentation by the seller of the property’s state. If the agent knowingly gave you false information to hide the property defect and you based your purchase decision on this, you have grounds for suing.
Work with your real estate lawyer to prove knowledge on the part of your real estate agent.
Home Inspectors
Suppose you hired a qualified home inspector for a home inspection before closing the sale, and they did not find the problem that he should have identified. In this case, you can sue them for negligence or professional malpractice. But carefully review the inspector’s report first to ensure that they did not mention it. In some cases, the issue was stated in the report, but the buyer missed it.
Before suing the home inspector, check the contract with them. It usually includes a limitation of liability clause. That means no matter how much you have to spend on repairing the problem that was not reported, the inspector’s liability is limited to the fee you paid them. That typically ranges from $300 and $500. It may, therefore, not be worth your while to sue for that amount.
Bringing the Case to Court
Bring your case to court once you have established solid grounds. These include:
- Provable non-disclosure or willful concealment of the known property defect by the seller or real estate agent
- Reliance on such misinformation in making your purchase decision
- Proof of the amount you paid or will pay for repair or the decrease in the property value due to an environmental hazard
You have two choices when suing. You can file your lawsuit in a small claims court or a state court.
It is much easier, faster, and less costly to file in a small claims court. There is, however, a low ceiling for the damages that a small claims court can award. It varies among states but ranges from $1,500 to $15,000. If your repair expenses are much more than that, you cannot get the amount you need.
Your real estate lawyer can help you file for what is due to you in the state court. You may include the legal fees you incur in the damages you seek.
On Hindsight: Avoiding a Bad Home Purchase
The best way to avoid buying a house with hidden property defects is to be as informed as possible about the property you are buying and the process of purchasing it.
It might help to hire two qualified home inspectors so that you can compare their findings. Pore through the seller’s disclosure and the home inspection reports thoroughly. More importantly, get a real estate lawyer to help you include adequate contingency clauses in the sales contract to protect you.
Aminov Law Group, P.C. lawyers have the expertise and experience to navigate New York real estate law and resolve real property problems. If you need legal assistance with a real estate purchase, contact us for a free consultation on your case.