Imagine that your family buys a beautiful home in Mississippi. You had done your homework on the neighborhood and school district, and visited the property on several occasions. The home seemed to be in great condition, and the seller did assured you that all was in good condition and working order. But when you move in, you realize that the seller had not been entirely straightforward. Perhaps the dishwasher and refrigerator do not turn on; the ceilings in the basement have a mold outbreak; and the roof leaks into the attic whenever it rains. These problems will be expensive to repair, not to mention time-consuming and frustrating to deal with.
Did Mississippi law require the seller to inform you about these issues before you bought the house? And, since the seller never did so, do you have any legal remedies to recover your expenses?
Before determining whether or not you can sue your seller for failing to disclose these problems, you should review Mississippi’s Property Condition Disclosure Act. This Act requires that sellers of residential property make certain disclosures to prospective purchasers about known physical defects on the property.
M.S. Code § 89-1-501 et seq. provides the seller of any residential property to “deliver to the prospective [buyer] a written statement required [herein]… as soon as practicable before transfer of title.” Your legislators in Jackson were obviously trying to protect you, forcing the seller to provide relevant information about the property and articulate any facts of which the seller was aware that might negatively affect its value. This requirement for disclosure could cover a wide variety of defects in the home, ranging from the condition of the roof to the condition of the fuel tank.
What exactly should you have received from the seller? The Mississippi Real Estate Commission (MREC)--a state agency charged with oversight of the real estate industry--provides a disclosure form that contains all of the necessary information.
You should have received this form sometime prior to the closing. If you dig it out of your files, you will see that it's fairly short. It is divided into 13 sections, which ask specific questions about different areas of the home. These cover everything from legal issues (are there any easements on the property?) to structural issues (has there been any remodeling?). The seller should have checked “Yes,” “No,” or “Unknown” for each question.
Remember, though: The seller did not have to inspect his own property or verify the information he or she disclosed. Mississippi does not expect homeowners to know every detail about every inch of the home. M.S. Code § 89-1-507 says that, if some information that is “required to be disclosed is unknown or not available” to the seller, and the seller made some “reasonable effort to ascertain it,” the disclosure need only include known information.
If you discover defects in your new home, do not panic. First, find the disclosure form among your papers from the closing. (If you cannot locate it, ask your real estate agent or attorney if he or she kept a copy in your file).
Review the disclosure form and determine whether or not the seller revealed any information about the condition(s) you now face. If the seller did, in fact, reveal the condition and you chose to ignore the warning and proceed with the sale, you likely will not be able to recover. But if the form says nothing about the seemingly obvious defects; or denies them all together; Mississippi law provides you with several causes of action.
First, M.S. Code § 89-1-523 notes that a seller who “willfully or negligently violates or fails to perform any duty [in this Act] … shall be liable in the amount of actual damages suffered by a transferee.” M.S. Code § 89-1-511 further requires that every disclosure “shall be made in good faith.” The statute defines good faith as “honesty in fact in the conduct of the transaction.” In other words, the statute is clear that the seller should not lie to you, or play games in phrasing disclosures to obfuscate the truth.
Second, you may have two common law causes of action against your seller, for fraud or breach of contract.
Fraud can be the basis of a lawsuit in cases where one party made a statement that was knowingly false to induce another party to take an action. Imagine that the seller told you that he would have all mold in the ceiling removed before you moved into the home. But upon moving in, you discover that he never did so. Clearly, the seller made a knowingly false statement to induce you to buy the home.
Similarly, you may have a breach of contract cause of action against the seller if the language of your contract made certain guarantees. For example, your purchase contract might specifically state that certain new appliances would be installed before the sale. If this turns out not to be have happened, the seller may be in direct breach.
You may wish to meet with a Mississippi attorney with experience in real estate law if you discover an unfortunate surprise after moving into the home. You or your attorney should write to the seller, agent, or both, stating the problem and outlining your costs. Demand letters can sometimes make a potential defendant eager to settle a dispute before it erupts into a full-blown lawsuit. Often, demand letters will be taken more seriously when they arrive on law firm letterhead, since it shows the potential defendant that you are strongly considering legal recourse.
In short, the Magnolia State gives you a number of avenues to pursue legal justice against your seller, if you believe that your seller intentionally withheld information about the property.