There is a form that is required, but it’s not required in all deals. The disclosure form is supposed to be filled out by the seller which states issues that they have had or know of regarding the property.
We have received many calls from people who have purchased homes saying they have found something wrong that wasn’t disclosed by the seller. The buyer cannot rely on just the disclosure form. They also have to rely on their own inspection.
As an example, a seller we represented sold property where termites were discovered behind the panel of wood in the basement when they decided to renovate the basement. However, our client didn’t know about the termites. In fact, there was an actual inspection for termites and the termite inspecting company didn’t discover it either. In situations like that, where the seller doesn’t know about the issues and isn’t trying to hide anything, the seller wouldn’t be responsible.
The reverse can also happen where the client who has purchased a property encounters a hidden defect. The buyer, our client, has found out that not only was that defect there and not disclosed, but it was hidden by the seller. When they call the inspector out to look at it and find out how much it is, the inspector might admit that he or she had been there before with the seller and was notified. In this case, there is an exception if there is a hidden structural defect not easily detected by the buyer, but the seller knows about it. In essence, it’s fraud, and there could be damages.
Q: If for example, termites were not discovered by your inspector, is there ever a possibility of suing the inspector for failing to find them?
It’s possible, but you are going to have to look at the agreement between you and the inspector. In many of these agreements, the inspectors have gotten wise to this issue and often they have been released from liability. The agreement needs to be looked at carefully and you need to know what you are getting in terms of an inspector.
Probably the best situation for a buyer purchasing a house that is being constructed by the seller, is hiring an inspector who is also an engineer who will periodically go out during construction and inspect the property as it is being built.
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