No doubt, buying a new home can be stressful. But to find defects, problems and surprises after closing, that’s infuriating. Sometimes it’s bad enough to call a lawyer. This column is designed to make a preemptive strike, to try to explain that these types of cases can be difficult. Success in this type of lawsuit requires a special set of facts. First, here are the basics:
Caveat emptor
This is Latin for “buyer beware.” Maybe your dad said this to you when you were 16 and wanted to buy that 1979 AMC Pacer. Your dad was right; that ancient legal precept is alive and well in the Commonwealth of Virginia.
When you set out to buy a house, the seller has certain disclosure requirements mandated by the Virginia Code. But guess what—those disclosures have nothing to do with the items that will shoot up your blood pressure after closing (the condition of the roof, moisture damage in the subflooring, defective plumbing, foundation problems and on and on). That’s on you. Now, if you ask the seller a direct question and get a direct answer, that’s different (discussed below). But, overall, it is your duty to inspect and discover any of those issues. You will generally have no recourse against the seller later after closing.
Most standard real estate contracts, such as the Real Estate Information Network (REIN) form Standard Purchase Agreement, provide an option for the buyer to have a home inspection. Always do this. Unless you are a free-wheeling-big-money person who is buying real estate site-unseen and can afford to absorb the consequences (aka one-percenter problems). The home inspector will advise you with a list of concerns, some small, some maybe big. A standard REIN contract will contain a Property Inspection Contingency Removal Addendum, or “PICRA.” This is the part of the contract where you can list items of concern that you, as the buyer, would like replaced or repaired. You and the seller will negotiate on those items. But, at bottom, this is all on you, the buyer. Because you were given an opportunity to inspect the property, you will have no cause of action against the seller, unless…
Fraud
The litigator’s favorite “F” word. If a seller deliberately conceals defects, or does things to divert you or “throw you off the scent” of a problem, that can be actionable as fraud. Fraud is the only exception to caveat emptor. A famous case in Virginia involved a seller who lit scented candles, incense and ran the fireplace each time the buyers visited the property. The seller was deliberately concealing a sewage problem, and the burning charade was designed to disguise the odor. That’s fraud. That type of conduct punctures the caveat emptor doctrine and holds the seller legally liable.
Given that we live on the Virginia Peninsula, a common question by potential buyers of waterfront property is: “Did this house flood during Isabel?” If the answer is “no” and the seller darn well knows that it did, and you can prove it with a homeowner’s claim, fraud has occurred.
That is why a listing agent will often caution the seller against direct conversations or answering direct questions with a potential buyer. But, if you are the buyer and your seller is willing and happy to talk with you, by all means, find out as much as you can about the house. Again, the duty of discovery, and caveat emptor, rests on the shoulders of the buyer. Take heed and hire a good home inspector.
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