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Legal Relief for Homebuyers Who Unknowingly Purchase Money Pits

Written by: Ryan Stauffer on April 04, 2017 | Category: Blog | Tags:

It’s a homebuyer’s nightmare scenario. You buy what seems to be a great house, but then begin to discover problems — mold, termite damage, rotting wood, water infiltration, sagging floors, cracking beams. You think the previous owners must have known about these problems, but they were nowhere on the seller’s disclosure form. How did the home inspector miss all of this? Now, a contractor is saying that the home you just bought for $350,000 needs $150,000 in structural repairs. Is there any way out of this money pit? Luckily, in Pennsylvania there are several legal options for homebuyers who find themselves in this unfortunate situation.

One option is to seek recovery from the seller of the home. There are several legal theories that permit a homebuyer to file suit against a seller who denies the existence of known problems or misrepresents the condition of the home. Principal among these legal theories is Pennsylvania’s Real Estate Seller Disclosure Law (“RESDL”), which was enacted in 2001 and requires sellers of residential real estate to disclose to buyers any known material defects in a property disclosure statement. Under the RESDL, a seller may not make representations that the seller knows or has reason to know to be false, misleading, or deceptive. Importantly, the seller’s real estate agent is also bound by this law. If the seller or the seller’s real estate agent knew of a material defect in the home that they misrepresented or failed to disclose to the buyer, they can potentially be held liable under the RESDL and the buyer has the opportunity to recover from them the funds to make necessary repairs. In some situations, it may even be possible to undo the sale and obtain a refund of the purchase price, plus the cost of any home improvements made by the buyer.

Another option is to seek recovery from the home inspector who failed to notify the buyer of the home’s problems. Pennsylvania’s Home Inspection Law exists for this specific purpose. The Home Inspection Law provides that if a home inspector fails to identify problems that should be identified by a reasonably prudent home inspector, they may be liable to the buyer and required to pay for the cost of remedying the problems not identified in their report.

No matter which legal remedies are available to the unlucky homebuyer, time is of the essence. A claim under the RESDL must be filed in court within two years of the date of final settlement. There is even less time to file a claim under the Home Inspection Law — just one year from the date the home inspection report is delivered. In many situations, defects in a newly-purchased home may not become known to the buyer until months after closing, especially if the defect is only occasionally obvious, such as during a particular season or at times of heavy rain. Because of the short window to bring a claim, it is important to seek help quickly if you believe your recently-purchased home has a significant defect.

These laws, and other legal remedies that may apply, are extremely fact-specific. If you have questions about your situation, do not hesitate to contact us to review your circumstances and potential options.

Attorney Ryan L. Stauffer is a member of the firm’s Litigation Group, representing individuals and businesses in court cases.

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