When you are either purchasing or selling a residence, you will become familiar with the Seller’s Disclosure Statement which is provided by a seller of a residence. This Statement is designed to disclose all known defects and/or issues with the residence to a purchaser. While some of the issues may be readily apparent to the purchaser of the residence, there are times when issues are latent, or hidden, in nature. The well established law in this area provides that it is the duty of the seller to disclose any latent defects of a residence if they either knew or have constructive knowledge of the existence of the condition. The types of conditions which must be disclosed are those which are material to the transaction and which may directly affect a purchaser’s decision to purchase a residence.

Should a seller not disclose these latent defects, which are material to the transaction, to a purchaser, the purchaser may be able to rescind the transaction or obtain monetary damages if it is demonstrated that the seller either knew or constructively knew of the issues affecting the property. Material defects can concern issues with the structure, the property surrounding the structure, or even nearby conditions which may affect the residence. Obviously, if a condition is hidden and it appears to have been concealed by the seller, this may favor the purchaser and may allow them to either rescind the contract or to obtain damages.

If a lawsuit is commenced to rescind the contract or to obtain monetary damages, the relief which is granted will depend upon numerous circumstances concerning the extent of the condition and how it affects the property. Which remedy is more appropriate is to be determined on a case by case basis. Regardless, it is always the best practice to disclose all conditions known by a seller. This avoids the possibility of future litigation by a purchaser. On the other hand, it is a good idea if you are the purchaser of a residence to specifically inquire as to all conditions, whether they are readily apparent or latent. This may protect you if a latent defect later comes to light which should have been disclosed.

If you are being sued for a latent defect which a purchaser claims you had knowledge of, or if you are a buyer who wishes to sue a seller for a latent defect, it is recommended that you consult with competent counsel. The attorneys at Stark & Stark can help you in this regard.