Whether new construction or previously owned, many homes have defects, and potential buyers have the legal right to know about them. A lot of defects are minor cosmetic issues that are easy to fix, but others may be major structural problems that can lead to bigger problems down the road and result in large repair bills. Sellers are obliged to reveal any defects they know about or should have known about.
In new construction, minor defects can include things like:
These defects are easy to fix and your homebuilder should arrange the repairs as soon as you report the problem. Bigger issues may not be obvious until you have an inspection done. Ideally, if you are having your home built you will have periodic inspections performed to catch problems early. Unfortunately, not all builders allow this, so you may need to rely on a final inspection to catch defects. Major construction defects include things like: + Poorly laid foundation, which can lead to deep cracks in the foundation - Improperly graded soil, which may cause foundation cracks or even shifting of the home off its foundation - Improperly installed roofing - Missing moisture barrier in a damp climate - Missing or deteriorating flashing
Any of the above defects can eventually lead to moisture leaking into the home, which can then cause mold or rot down the road. Foundation problems can also cause large cracks in interior walls and improper settling. Additional major defects may include:
In a previously owned home, defects can include any of the above construction problems that were never repaired, as well as further damage they may have caused, including:
Other defects can include flood damage, which may also include mold or rot, an aging roof, and non-structural issues like title problems and neighbor conflicts. Some localities also define "stigmatized property," i.e., a home with a "reputation" rather than physical problems, as defects. Examples might include a supposed haunted house or one where a murder occurred. State laws vary regarding responsibility to disclose this type of information.
A home seller is required by law to disclose any major defects to a potential buyer. Specific procedures and statutes of limitation vary by state.
New construction should come with express and implied warranties from the builder and those should cover defects. The builder is responsible for making the necessary repairs. If the builder is unable or unwilling to cooperate, you may have to talk to a lawyer familiar with construction law or contact the local government agency that regulates construction. General contractors are also responsible for the work their subcontractors do, so don't let yours tell you that it is not his responsibility. The law recognizes two types of defect. The builder is liable for both, but only if you file a claim within the statute of limitations.
On resale properties, the seller is not obligated to fix defects, only to disclose them, unless he or she agrees in writing to make the repairs. Some buyers ask this as a condition of sale. Once you close on a home, you are responsible for any defects you find. The exception is if you can show the seller or seller's agent deliberately withheld the information, i.e., they committed fraud or misrepresented the home's condition. In that case, the seller can be held responsible for your repair costs. Always have a thorough inspection done before closing on a home.