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What is a failure to disclose?

| Feb 23, 2021 | Real Estate Disputes |

Purchasing a home is an exciting prospect. The process may feel arduous and stressful if a buyer does not know what to expect.

What happens if a dream home has pre-existing issues? Under Texas law, some property owners are legally obligated to disclose defects in advance of a sale. Find out what the court considers a failure to disclose.

What is a property defect?

Before a closing occurs, sellers must disclose any adverse property conditions they know about. An adverse condition that qualifies as a defect impacts the property’s value and may pose a significant safety risk. The most common defects a seller must disclose include:

  • Termite activity or damage
  • Electrical issues
  • Plumbing problems
  • Water intrusion
  • Roof damage
  • Property line encroachments or disputes

Who is exempt from disclosing defects?

When a seller lists a property “as is,” or if the home is new construction and the seller is the builder, the law excuses the property defect disclosure. In all other circumstances, the seller must disclose issues.

What is a property inspection?

During the period between contract signing and closing, the buyer has the right to obtain an independent property inspection. This independent party conducts a thorough investigation of the home. If the property inspection reveals apparent damage or defects that the seller should know about, the buyer may terminate the contract. The buyer may also choose to ask the seller to fix the issues or choose to purchase the home in the current condition. This last decision means the buyer waives the right to seek legal remedies in the future against the seller for these defects.

A property defect does not have to sink a home sale. It does, however, either need fixing or disclosing, or the purchaser may take legal action.

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