Can you sue the Seller for failure to disclose issues?

October 30th, 2017 - Bryan L. Page

The biggest purchase people make in their lives is often their house. Buying a house can be stressful. It also comes with a lot of unknowns. Buyers do not get many opportunities to inspect a house before buying it. So, there is risk that once you buy a home you will discover problems you did not know about.

When people discover problems with a home they bought, they often want to know if they can sue the seller for failing to disclose the problems. As will be discussed below, there is a potential remedy a buyer may have against a seller, but these types of cases are often difficult to prove.

Seller’s Obligation to Disclose – The Seller Disclosure Statement

First, what obligation does a seller have to disclose defects in a house to a buyer? In Washington, there is a law that requires sellers to fill out and give the buyer a “seller disclosure statement.” That law can be found in chapter 64.06 RCW. There are some limited exceptions. Generally, any individual selling their house to another individual has to provide a seller disclosure statement.

In that seller disclosure form, the seller must answer questions and disclose whether there are any defects with the property covering the following topics:

  • Legal title/ownership of the property
  • Water
  • Sewer or on-site sewage system (septic system)
  • Structural components
  • Systems and fixtures (plumbing, heating, etc.)
  • Homeowners association dues and assessments
  • Environmental concerns

There are specific, detailed questions that must be answered in each category. If there are defects identified in the answer to any question, the seller must explain the answer and attach relevant documents.

Liability of the Seller

But what if a seller does not disclose a defect? Can a buyer sue the seller for that failure to disclose? The short answer is yes, a buyer may have a cause of action for fraudulent concealment. But these cases can be difficult because of the proof required to win.

A buyer must prove the following elements against a seller:

  1. the house has a concealed defect
  2. the seller had actual knowledge of the defect;
  3. the defect presents a danger to the property, health, or life of the buyer;
  4. the defect is unknown to the buyer; and
  5. the defect would not be disclosed by a careful, reasonable inspection by the buyer.

Many of these elements can be hard to prove. For example, a buyer has to prove the defect was “concealed.” So, the defect must be hidden. If the defect is out in the open and easily visible, a seller has no duty to tell a buyer about that obvious defect. Similarly, a buyer also has to prove that the defect would not have been disclosed by careful, reasonable inspection by the buyer. So even if the defect is hidden, if the defect could have been found by a standard inspection, a seller is not liable for failing to disclose that defect.

As another example, a buyer has to prove the seller actually knew of the defect. Arguing that the seller merely “should have known” about the defect is not enough. It must be proven that the seller had actual knowledge of the defect. That can be difficult.

Finally, if a seller does disclose some aspect of a defect, it is then up to the buyer to make a full inquiry and inspection of that defect. For example, say a seller discloses there is some water damage to the house. After purchasing the property, the buyer discovers that the water damage is extensive. The seller is not liable for failing to disclose the full extent of the water damage. In such instances, courts place the duty on the buyer to fully investigate defects that are disclosed by the seller.

All of this makes it hard to successfully bring claims against a seller for failing to disclose defects.

What To Do

So, what should someone do when they are buying a house? There are a few easy tips buyers can follow to avoid major problems after purchasing a property:

  1. Always get a seller disclosure statement and review it carefully. If you have any questions about any answers, ask the seller for more details.
  2. Get a home inspection. Home inspectors are not perfect, but they can catch many things of concern that a general lay person would not catch.
  3. If any defects are disclosed by the seller or by the home inspection, fully investigate those defects to your satisfaction before closing the purchase. If you are told or learn about a defect, you cannot hold the seller liable.

Doing these simple things can help avoid many big surprises after purchasing a property.

Disclaimer: This article and blog are intended to inform the reader of general legal principles applicable to the subject area. They are not intended to provide legal advice regarding specific problems or circumstances. Readers should consult with competent counsel with regard to specific situations.

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