What Are Real Property Latent Defects
Real property latent defects are defects to real property that are not easily discovered by a contract purchaser in the course of a home inspection or property walk through inspection. Latent defects often include things like, plumbing problems, flood damage, faulty electrical wiring, or structural problem but can also include problems with the roof or HVAC or other systems of the real property. Often a real estate purchase agreement will include a buyer’s right to inspect the property that they are purchasing. However, your typical home inspection is not an exhaustive inspection, but rather is a visible inspection and therefore by its very nature unlikely to identify latent defects or unseen problems with the property.
Why Should Real Estate Buyers Be Aware Of Latent Defects?
The problem latent defects can pose for a prospective real estate purchaser is that a visual inspection of the property is unlikely to discover the defect, even if the home inspection is performed by a licensed home inspector. As a result, it is most often the case that one only discovers latent defect damage after they have moved into the property, and had an opportunity to experience the defects.
In some cases, a real estate purchaser may attempt to have their purchase agreement include representations and warranties by the seller that the real property does not have any latent defects. However, if the seller has no knowledge of the latent defect then there can be no liability for the seller. In contrast, if the seller knows about a latent defect that is not visible to the purchaser or that unseen damages exist the seller has an affirmative duty to disclose the unseen damage to the buyer.
Buyer Beware And The Difference Between Latent Defects And Patent Defects
The principle of buyer beware otherwise known as caveat emptor requires the real estate purchaser to satisfy themselves prior to entering into the real estate purchase contract as to the condition of the real property. Thus the seller has no obligation or duty to the buyer to disclose any defects in the real property that can be discovered by a reasonable inspection and ordinary care on the part of a buyer. This legal concept is a patent defect.
Exceptions To The Principle of Buyer Beware
District of Columbia consumer protection law carves out a number of exceptions to this general principle of buyer beware. For example, a seller has no obligation to disclose a patent (visible) defect to the buyer. However, the seller also cannot attempt to hide or conceal such a defect. Furthermore, they must do so that the buyer can’t discover it. This refers to fraudulent concealment and results in liability attaching to the seller.
Most of the exceptions to the general principle of buyer beware relate to latent defects or hidden damage and include:
- Fraudulent misrepresentation;
- Knowledge of a latent defect which renders the home uninhabitable;
- Recklessness as to the truth or falsity of statements relating to the fitness of the property for habitation; or
- Breach of a duty to disclose knowledge of a defect.
Remedies For Latent Defects
In latent defect litigation, the burden of proof is on the real estate purchaser. The purchaser must prove the existence of a latent defect. Usually, damages to the purchaser will follow if the latent defect is a defect affecting the habitability of the property. In the case where a real estate purchaser enters into a purchase contract by deception, the purchaser can rescind. However, you must promptly take important steps to preserve this right. Furthermore, one can foreclose this right if one takes certain steps with respect to the property.
Contact our DC Law Office for More Information
Finally, for more information regarding real property latent defects, contact us at 202-803-5676. You can also directly schedule a consultation with one of our skilled attorneys. Additionally, for general information regarding real estate law, check out our blog.