Legal Remedies If a Home Seller Lies or Conceals a Defect in Washington

What Washington home buyers can do after discovering undisclosed home defects.

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Picture this: You found your dream home in Washington State and put in an offer. Three months later you’ve successfully closed escrow, packed, moved, and just unpacked your last box of possessions. You are relaxing in your new living room, and throw your head back to sigh with contentment, when you notice a water spot in the corner of the ceiling.

After hiring a contractor, you discover that the roof has been leaking for about the last nine months, including during the time you were looking at buying the home. You figure the leak was something the seller must have known about, as would the home inspector you hired at the time. Yet no one mentioned the problem to you, in spite of Washington’s seller disclosure laws.

Many things can happen to a home throughout its lifetime, and not all of these things will be anyone’s “fault.” If, however, a situation like the one above occurs, with a serious issue that you did not notice before buying the home, and which you also didn’t learn about from the seller disclosures, the home inspector, or the listing broker, you may have a legal remedy or solution – based on the liability of the seller or other parties for not disclosing the issue to you.

Upon Discovering Home Defects, What Should You Do First?

No matter what issue you discover, the first thing to do is take steps to minimize damage that has already occurred and reduce or eliminate future damage where you can. The exact steps you take will depend on what the problem is, but decreasing the damage caused is not only the best step for your home, but will also be a positive factor if you need to pursue legal action.

In some circumstances, particularly in making an insurance claim, you have a “duty to mitigate,” meaning that once you discover a problem you are supposed to do what you reasonably can to minimize damage that has occurred, and to keep more from happening as a result.

The second thing you should do before even thinking about who might be legally responsible is to contact your insurance company to report the damage, and then contact the appropriate professional (contractor, plumber, roofer, and so forth) who can let you know how the problem can be fixed.

Some buyers mistakenly think that in order to maintain the option of pursuing legal action, they must leave the problem alone and let the damage keep occurring in order to “prove their point.” Luckily, this is not the case. You should, however, keep records of any expenses related to the problem, take photographs of the damage, and maintain records and photographs from any experts who come to inspect or fix the affected areas.

Is Someone Legally Responsible for Not Warning You of Home Defects?

Though the facts in every scenario are unique and no two results will be the same (nor can legal success be fully guaranteed), if a seller had actual knowledge of the problem and did not disclose it to you on the seller disclosure statement, you may be able to pursue a misrepresentation claim or other legal action against him or her. (See “Residential Home Sellers in Washington: What the Law Requires You to Disclose” for details regarding the seller’s obligations.)

You will likely, however, need to do some detective work or get some expert opinions in order to find out what the seller actually knew. A seller who claimed no knowledge of a problem on the disclosure statement is likely to stick to that story later. To overcome this, you might have to come up with evidence that, for example, the seller called in a repairperson, patched or otherwise tried to fix the problem, or simply could not have failed to overlook the problem during its most serious phase.

You may also be able to sue a real estate broker who had actual knowledge of a material (“important”) defect that you did not know about and was not otherwise disclosed to you, A real estate broker’s duties are described in “Home Sales in Washington: What the Listing Real Estate Broker Must Disclose.”

As to the home inspector, generally any potential liability is more limited. There are, however, circumstances in which the home inspector could still be liable for failing to meet professional standards. Review the details of your situation with a local real estate attorney to determine this.

Time Limitations on Legal Action Over Washington Home Defects

In typical home defect disputes in Washington there is a time limit for bringing a legal claim, referred to as a Statute of Limitations. These time limits are usually in yearly increments and vary depending on what type of claim you have against the other party, and are strictly enforced. As a result, if you do choose to pursue legal action you should consult with an experienced real estate attorney as soon as possible to ensure your claims can be addressed.

Pursuing Remedies for Undisclosed Home Defects

If your legal action is successful, your possible compensation may include reimbursement for repairs you made to fix the problem (which is why keeping your receipts is so important) as well as reimbursement for any additional home inspections that were necessary as a result of the issue. Further, depending on the circumstances, the court could also award separate monetary amounts to pay for a portion of your attorney’s fees or for other types of expense.

Another (rarely used) option that you can request in a home defect case is to have the court order rescission. This means that the court will cancel your original purchase agreement with the seller and will try to put you both back in the positions you would have been before the sale.

In some Washington cases with special circumstances, remedies for undisclosed home defects have even included a monetary award for loss of income (for instance, when a buyer’s business tools and equipment were contaminated by the home defect and had to be abandoned, resulting in the buyer not being able to work; see,Bloor v. Fritz, 180 P.3d 805 (2008)). The award in the Bloor case was accompanied by a further order to compensate for damage to the buyer’s credit rating when his inability to work left him unable to pay his mortgage payments on time, resulting in a negative credit rating.

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