What can a homebuyer do if they discover an issue with the property after closing has occurred?

When selling a residential property in Maryland, the seller is required to provide the buyer with either a disclaimer (meaning the property is sold “as is”) or a disclosure statement alerting the buyer of all known defects of the home.

”As is” versus disclosure statement

If the seller opts to provide a disclaimer statement, they are selling the property “as is.” This means that the seller is providing no warranty as to the condition of the home; however, the seller is still required to notify the buyer of any defects that could not be identified through a visual inspection and of which the seller is aware.

If the seller opts to provide a disclosure statement, the seller will complete a form wherein they will state whether or not there are any defects in various parts of the property and whether there are any zoning violations, easements, or restrictions imposed by a homeowners association or similar community association.

If the seller fails to disclose what was required, or misrepresented any facts in its disclaimer or disclosure statement, the seller may be liable to the buyer for damages caused by issues arising after closing.

Intentional versus negligent misrepresentation

If a homebuyer experiences an issue that they believe should have been disclosed prior to closing, they may either file an action against the seller based on a claim of intentional misrepresentation or negligent misrepresentation.

To succeed in an action for intentional misrepresentation, the homebuyer must prove: (1) that the seller asserted a false representation of material fact; (2) that the seller knew that the representation was false (or that the representation was made with such reckless disregard for the truth that knowledge of the falsity can be imputed to the seller); (3) that the seller made the misrepresentation for the purpose of defrauding the buyer; (4) the buyer relied with justification upon the misrepresentation; and (5) the buyer suffered damages as a direct result of the reliance on the misrepresentation.

To succeed in an action for negligent misrepresentation, the homebuyer must prove: (1) the seller, owing a duty of care to the buyer, negligently asserted a false statement; (2) that the seller intended his or her statement to be acted upon by the buyer; (3) that the seller had knowledge that the buyer will probably rely on the statement, which, if erroneous, will cause loss or injury; (4) the buyer justifiably takes action in reliance on the statement; and (5) the buyer suffers damage proximately caused by the seller’s negligence.

Schedule a consultation with real estate attorney Ryan Lewis

Attorney Ryan D. Lewis offers legal services for real property tax liens, foreclosures, landlord/tenant disputes, and other real estate property law issues.

Mr. Lewis has been actively involved in servicing thousands of real property tax liens. The wide-ranging real estate and litigation experience of Mr. Lewis allows him to identify and adapt foreclosure methods in order to guide the redemption process and minimize client risk. When a lien fails to redeem, Mr. Lewis is able to leverage his knowledge and skills in order to maximize asset protection and increase his client’s wealth.