Buying property since the real estate meltdown has changed dramatically! More than ever buyers now have to fear whether they are getting a deal or they are just being cheated. In this economy where the market has drastically slowed down, sellers will do anything to get a sale including hide information about the property. According to Pews Research, statistics show a home ownership surge among Asian Indians to almost 60% in 2008 (up from 49.1 percent in 1996). While the real estate blues continues in some areas, the returning surge in home ownership has caused the need to inform buyers of their rights. The principle of latent defect can protect buyers, and that’s good news!
What is Latent Defect?
Latent defect is a defect which an ordinary purchaser would not be expected to discover in a routine inspection of the property. Normally, buyers have a conditional offer in the contract that states the contract will only be concluded upon the inspection of the home. A home inspector cannot open walls to investigate if sellers are hiding anything that you must know but I’m sure you’ve heard horror stories of the inspector failing to discover issues such as termite infestation or structural problems. In fact, the phrase “let the buyer beware” was coined because sellers were not obligated to disclose defects. Have you ever bought a car and it was junk but the seller was not responsible? They were not responsible because the legal term let the buyer beware applies and the buyers should do all the necessary inspection before purchase. But the same cannot be said when buying a house or any property. Just imagine spending a half a million dollars on a property and you find out serious structural or termite problems and you are responsible. This is where the law steps in to protect you! Where a seller knows of a latent defect and conceals it, the buyer can sue. If the seller knows of latent defects but actively conceals it from the buyer, then seller will be obligated to the buyer. An example of this might be if the seller patched the crack in the wall in order to hide a structural deficiency. In this case the purchaser can ask for the contract to be void and or compensated for damages.
The compensation that the buyers receives depends on the express terms of the purchase agreement which should include the right to have an inspection done and to demand that deficiencies are either fixed or, if the vendor is unwilling to do this, you as the purchaser have the option of cancelling the transaction. The importance of an attorney when purchasing a property is to craft a contract that foresees all possible problems with the property to offer the best protection available for the buyers. Where the terms of the contract contains omissions or gaps the seller may escape liability. The attorney has the knowledge to craft an ironclad contract that protects you versus the do-it-yourself approach. Buying a property is one of the biggest investment anyone can make and having buyer’s remorse because of latent defects should be avoided at all cost!
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