Preventing a Law Suit After the Sale of Your Home

2008-05-09T20:05:00.000-07:00

Most home sellers have two major concerns - getting the best price for their home and coordinating the sale with the move to their next home. A competent real estate agent, proper staging, easy access, a comprehensive marketing program, and pricing the home to the present market will usually address these two issues.

Unfortunately, these two issues, while important, should not be your greatest concern. We live in a litigious society with many people who have lost their moral compass. Suing is their pass time activity. Law suits after the sale of a home are not uncommon. They can lead to significant legal expenses and financial ruin for the seller.

I'm sure you are not surprised that there are attorneys who specialize in suing unsuspecting sellers, after the sale of their home? It doesn't matter if the person who buys your home has a legitimate complaint. The financial impact of a law suit is the same.

Even if their suit is unfounded, you will need an attorney to defend yourself. There will be depositions filed and hours and hours of attorney fees to pay for. Your legal fees will cost thousands of dollars. There's no insurance policy available to protect you. The prosecuting attorneys operate on the premise that, right or wrong, you will give up to stop the bleeding.

New York State created a Property Condition Disclosure law to try to address this problem. They created a questionnaire for the seller to sign, disclosing the condition of their home. The seller can choose not to sign the form and give $500 to the buyer at the closing.

The Property Condition Disclosure questionnaire is supposed to protect the home buyer from a seller concealing the need for expensive repairs in the home they are selling. Some attorneys advise their clients not to fill out the questionnaire and pay the $500. Others recommend completing the form.

Either way, you loose. If you don't fill it out, your first loss may be a buyer who is reluctant to purchase your home, because he wonders what you are hiding.

If you complete the form, and the buyer subsequently finds structural problems that were not revealed, the buyer's attorney will use the completed form to indicate that you lied; and create an action against you. To defeat the law suit, a seller will have to take the issue to the appellate court. It will be very costly.

If you don't fill out the property condition disclosure form, and significant defects in the home are discovered after the sale, even defects you weren't aware of, the buyer's attorney will say you intentionally concealed this information. Instead of providing a solution, the disclosure law exasperated the problem. Either way, if you are the seller, you loose.

There is no insurance policy available to address this for the seller. How do you protect yourself? First, anyone can sue. You can't stop a dishonest person from suing. You can make sure they don't have a legitimate cause of action.

The most prevalent hidden defect is mold and mildew behind the walls of a home. It's a very common problem; and can only be seen with an infrared camera. You could insist that the buyer's home inspector check for mold; or insist that the buyer give you a written release, if they don't want to incur this extra expense.

As a representative of the seller, I'm not legally allowed to give advice to a buyer or their real estate agent. To circumvent agency law and protect my clients, I get written permission from my seller clients to be allowed to make sure the buyer's agent for their home puts the necessary clauses in the purchase offer to protect my client's interests.

These issues must be addressed in writing, before going to contract. Verbal notice has little credibility in a court room. Parties to a law suit have convenient cases of amnesia. Without sufficient supporting documentation, what was said is usually treated as heresy.

Whether I'm a buyer's agent or a seller's agent, I want the buyer to have written notice that they have an opportunity and the obligation to inspect for all the potential problem areas in your home. They don't have to complete all the inspections; but the onus of responsibility is now on their shoulders.

Both sides have to win, and no one wins a law suit. I do my best to prevent a legitimate law suits by addressing all the critical issues, in writing, during the initial stages of the purchase.

I hope you found the above information useful. If you would like to see additional buyer or seller recommendations, visit my web site at http://dutchesscountyrealestate.net

Dutchess County Realtor

Preventing a Law Suit After the Sale of Your Home