What Can I Do About House
Defects After a Sale?
You’ve just purchased a home, and soon after moving in to enjoy your new residence, a defect shows up. For instance, you discover there are rusted pipes or poor sewer lines, maybe a wiring problem. What can you do?
Under Pennsylvania law, sellers of real estate must disclose any material defects to the buyer before both parties sign the purchase agreement. If the seller fails to disclose a known material defect, they can be held liable for any damages; however, the law also leaves some wiggle room for sellers who lack the expertise or savvy to detect a material defect.
If the home you’ve purchased is in or around Pittsburgh, Pennsylvania, and defects suddenly appear after you close the deal and move in, contact me, Marc V. Taiani, Esquire, and Allegheny Attorneys at Law, P.C. for legal guidance. I am an attorney who is well versed in Pennsylvania real estate laws and can help you determine the best course to resolve your situation.
I also proudly serve clients in Shaler Township, Ross Township, Fox Chapel, Penn Hills, Oakmont Borough, Aspinwall, and neighboring communities of Pennsylvania.
Defects That May Appear
A common list of defects that sellers often fail to disclose includes:
Hidden water damage
Huge cracks in the foundation
Bad sewer lines or rusted pipes
Septic tanks or heater issues
Poor or old ventilation or windows
Electrical, plumbing, and HVAC conditions
Rotted wood or termites
Seller’s Responsibility to
Disclose Material Defects
In Pennsylvania, Real Estate Seller Disclosure Law spells out which defects must be disclosed before the seller and buyer can sign a purchase agreement. In response, the Pennsylvania Association of Realtors created a form called Seller’s Property Disclosure Statement for use by member realtors and their clients.
The disclosure form is fairly comprehensive. The primary focus is on structural problems concerning the roof, basement, foundation, and walls. And it also requires disclosures about plumbing, electrical, heating, and air condition systems and whether they have any known defects. The buyer must also be informed if the house has been treated for termites or had water, rotting, or sewage problems. Buyers also must be told if the home has been remodeled.
The disclosure must go beyond just material defects but also reveal if there are any title, insurance, legal or financial issues. To conclude the form, there is a section for “Additional Material Defects.”
As for the definition of material defects, the law states that a material defect can have a "significant adverse impact on the value of the property or that involves an unreasonable risk to people on the property."
The law also states: “In completing the property disclosure statement, the seller shall not make any representations that the seller or the agent for the seller knows or has reason to know are false, deceptive or misleading and shall not fail to disclose a known material defect.”
What If the Seller Doesn’t
Know About Every Defect?
Some defects might not be that noticeable. The law does not require the seller to complete an inspection or analysis of the property to discover unknown defects.
The Disclosure Statement has a section requiring sellers to indicate their level of knowledge and training in the areas of engineering, architecture, and other occupations related to the construction and condition of the property.
If a seller indicates no knowledge or training in these areas and they fail to discover a material defect, it could be deemed an honest oversight. Those with knowledge and training in these areas, however, might be hard-pressed to use inexperience and ignorance as an excuse for not discovering a defect.
It is important to remember the legal standard is that the seller has an obligation not to make any representations they “know or has reason to know are false.”
Proving Liability for Defects
If a buyer discovers a material defect after completing the purchase, you will need to show that the seller failed to disclose the problem and that the problem existed before you purchased the home. As a result of the defect, you suffered a financial loss. Remember, however, that material defects must threaten personal harm or dramatically decrease the value of the property.
This brings up the question of home inspections. As a buyer, you should also order a professionally done home inspection before closing the deal, but what if the home inspector fails to discover a material defect that later shows up?
You’ll have to read the fine print of the home inspection report or your contract because it may contain clauses limiting the inspector’s liability. In many cases, if the inspector fails to find and or reveal a problem, you may only be able to get the money back you paid for the inspection.
According to the Real Estate Seller Disclosure Act: “An agent of a seller or a buyer shall not be liable for any violation of this chapter unless the agent had actual knowledge of a material defect that was not disclosed to the buyer or of a misrepresentation relating to a material defect." Real estate brokers and agents then are only liable for fraudulent and intentional misrepresentations.
Steps to Take
Before initiating a lawsuit – which has a two-year statute of limitations from the date of closure – you should send a demand letter to the seller. Your attorney can help you draft this.
If this fails, you can suggest mediation, and if those steps also fail, you can initiate a lawsuit. If your damages are $12,000 or less, you can sue in small claims court and represent yourself. For larger sums than that, you should huddle with your attorney to discuss options.
If you can prove fraudulent or intentional misrepresentation by the seller or the selling broker, you can sue for anything from the actual amount of damages up to three times that amount, under Pennsylvania law.
How Legal Counsel Can Help
If you discover defects that weren’t disclosed after purchasing a home in Pennsylvania, contact me, Marc V. Taiani, Esquire, and Allegheny Attorneys at Law, P.C. today. I can discuss the situation, assess the damages and the responsibility of the seller and broker, and chart a path moving forward. I proudly serve clients in Pittsburgh, Shaler Township, Ross Township, Fox Chapel, Penn Hills, Oakmont Borough, and Aspinwall, Pennsylvania.