Founder
Purchasing a home or other real estate can be exciting, but the process is fraught with potential pitfalls. The buyer and the seller are necessarily in adversarial roles. This means that while the buyer wants as much disclosure of problems as possible, the seller is likely to downplay or conceal issues. Massachusetts law sets certain minimum disclosure requirements. Failure to be truthful could expose the seller to liability. Whichever party you are to a real property transaction, you can benefit from the guidance of LaFountain & Wollman P.C.
The Seller’s Obligation to Disclose
Buyers and sellers of property are on opposite sides of a transaction, which means there is no special fiduciary relationship between the two. A fiduciary relationship would obligate a party to put the other’s interests ahead of their own, something which is necessarily absent from a real estate transaction. Due to the nature of the buyer/seller relationship, the seller has only a minimal legal duty to disclose information about the property before selling it. That information includes:
- The nature of the waste disposal system: For example, a private waste disposal system, cesspool, or septic tank.
- The condition of the waste disposal system: Under law, the system must be inspected at the time of sale. In the event that weather prevents an inspection during the time of the sale, the inspection must occur as soon as possible and no later than six months following the transaction.
- Whether lead paint is present: This is a long-standing requirement. A home built before 1978 must be inspected to determine whether there is any lead paint.
Other Property Defects
Beyond the above items, the seller is not required to voluntarily disclose anything. However, if the potential buyer asks about known defects or if certain repairs need to be or have been made, the seller must answer truthfully and fully.
“Known” is a term that often becomes a point of contention between the buyer and seller. A seller has to actually have knowledge about a defect in order to be required to disclose it upon the buyer’s request. In other words, the existence of such defects must be definitively established at the time of sale. It is unacceptable for the seller to simply lie about a known problem.
Liability For Failure to Disclose
If the seller is not telling the truth about a property defect, and the buyer relies on the false statement or omission in deciding to purchase the property, the seller could face legal consequences. Among the claims that the buyer may raise in a lawsuit are misrepresentation, breach of contract, and fraud.
The buyer may also be able to pursue a claim under the Massachusetts Consumer Protection Act. This law primarily protects consumers against unfair or deceptive trade practices. In some cases, a seller could have to pay three times the buyer’s damages along with costs and attorney’s fees. It should be noted that this law will probably not apply to a real estate sale between an individual buyer and seller. However, it may be applicable to a business that is in connection with the sale like a construction company, contractor, or broker.
Legal Counsel You Can Depend On For Your Real Estate Deal
Rather than have to endure the time and hassle of a lawsuit, it makes more sense for the parties to a real estate transaction to simply follow the law and ensure that fair disclosures are made when they are required. Count on LaFountain & Wollman P.C. We can represent your interest in the real estate transaction regardless of which side of the deal you are on. Call us today to learn more.