Many people mistakenly believe that if the seller of a home fails to alert the home buyer about known defects, the buyer will have the law on his or her side.
In Massachusetts, however, the party selling a home will generally not be liable to the buyer for failing to disclose problems with the home itself, the property, or the various systems located thereon so long as that person is a private party and not a business professional (e.g. Mom & Dad vs a Property Developer). Typically, in order for the seller to be liable to the buyer, the seller must be obligated to disclose this information, which only arises in very limited circumstances, as defined by Massachusetts law. Absent this obligation, the buyer could be left without a legal remedy if a problem occurs. Because disclosure requirements are very subtle and specific, a real estate attorney is needed to protect the home owner from unnecessary liability and the buyer from failing to ask the right questions.
What a Seller Must Disclose to a Home Buyer
While a private seller generally has no obligation to voluntarily disclose known defects, he or she must do so when the buyer asks a specific question about the condition of the home, the property, or its various systems. In that case, the seller must answer truthfully, accurately, and completely to the best of his or her knowledge. Should the seller fail to do so, and the buyer reasonably relies on those statements, the buyer may have a claim against the seller even if the buyer failed to investigate those statements. In addition, while the seller is not obligated to disclose that which he or she does not know, the seller cannot actively avoid discovering the details of a suspected problem or tell half-truths.
When a Seller Fails to Disclose to a Home buyer
When the seller or seller’s representatives have failed to comply with their legal obligation to disclose defects, in addition to potential claims for fraud, misrepresentation, and breach of contract, the buyer may also have a claim under the Massachusetts Consumer Protection Act, General Laws Chapter 93A (“93A”). 93A primarily protects consumers who have been subject to unfair or deceptive trade practices. It is particularly powerful because under certain circumstances a defendant may be ordered to pay up to three times the buyer’s damages plus costs and attorney’s fees. It is important to note that while 93A can be applicable to someone who is acting in connection with a trade or a business, such as a construction company, contractor, or broker, it will unlikely apply when the deal is merely between individuals. While this may protect individual non-commercial sellers, it may not protect other parties who are involved in the transaction.
Septic System Disclosures in Massachusetts
The presence of a septic system must always be disclosed by the seller according to Massachusetts Title 5, which provides that property serviced by a septic system, cesspool or other private waste disposal system must be inspected within two (2) years before the sale or within six (6) months after the sale (if weather conditions prevent a pre-sale inspection; e.g. frozen ground). Only licensed inspectors and soil evaluators may conduct such inspections. Should a system fail an inspection, the buyer and seller may negotiate who will pay to repair or replace the system or, if the purchase and sale agreement contains a contingency, the buyer may decide to withdraw. Even if a system passes a Title 5 inspection, this is not a guarantee that the system will continue to function properly. Even a properly maintained system may only last an average of only 15 to 20 years. The buyer should always ask the inspector to check for signs that a septic system may be present as well as call the city or town where the property is located to inquire about whether a Title 5 report was ever placed on file.
Lead Paint Disclosures
If a home was built before 1978, the real estate agent (or if none exists the seller) must notify a prospective purchaser about the dangers of lead paint, and provide at least ten days for a lead paint inspection (this is done through the “Lead Transfer Notification Form” which must be given before signing the Offer to Purchase). Property owners must remove lead-based products, or make them inaccessible, if children under the age of six will reside there.
Purchasing a new home can be a rewarding and exciting experience, but it is not without potential pitfalls. By seeking appropriate representations about the condition of the property from the seller, and the seller’s representatives, the buyer will have a much better chance of protecting his or her investment in the future, if he or she has been misled. From the seller’s perspective, he or she must differentiate between what must be disclosed and what should not be disclosed in order to avoid a possible lawsuit in the future. If the buyer later realizes that he or she was misled about the condition of the property, the buyer may be able to pursue various claims, including relief under the powerful provisions of 93A.