When you bought your home in Missouri, you assumed that it was in perfect condition. But after moving in, you soon realized that the situation was not so perfect. Perhaps when you tried to take a shower, you discovered that there was no hot water on the second floor. Or when you attempted to open the window in the living room, you noticed a massive break in the glass pane, previously unseen behind a decorative screen. Needless to say, the seller never mentioned these issues prior to the sale.
Missouri’s nickname is the “Show Me State”—but what exactly did the law require the seller to show, or tell, you? Was the seller obligated to inform you of these obvious problems, and if so, might you be able to recover any of the repair costs from him or her?
Missouri’s legislature has placed certain disclosure obligations on sellers of residential real estate. However, the requirements are somewhat limited. Most states have legislation requiring home sellers to give an extensive written disclosure report to potential buyers. Such reports typically identify all material defects in the property, from a broken oven in the kitchen to a leak in the basement. While your Missouri seller did have to provide you with some information prior to the sale, the seller did not necessarily have to tell you about every single defect in the home—even if the defects were, by other states' standards, "material" or significant.
Missouri Rev. Stat. § 442.606 requires that if the property is or was used as a site for methamphetamine production, the seller must disclose that in writing to the buyer. Methamphetamine is a dangerous and illegal stimulant drug sometimes manufactured in homes, often in basements or bathrooms, leading to major toxicity. Sellers would need to disclose this criminal history only if they “had knowledge of such prior methamphetamine production.”
Similarly, the Missouri statute requires the home seller to disclose in writing whether the property was the site “[e]ndangering the welfare of a child” through “physical injury.” Again, the seller must only disclose incidents about which he or she is aware. These are highly specific disclosure requirements, but theoretically aim to prevent you from purchasing a home with a sordid criminal history.
Beyond these specific requirements, Missouri courts will typically enforce caveat emptor clauses in purchase contracts. Under the doctrine of caveat emptor (“let the buyer beware”), judges ordinarily refuse to compensate buyers for home defects found after the purchase.
This situation changes a bit, however, if the seller used a licensed real estate agent to help sell the home. Agents are held to certain standards of honesty under Missouri Rev. Stat. § 339.730.1, which requires that an agent “disclose to any [potential buyer] all adverse material facts actually known or that should have been known by the [agent].”
In other words, licensed real estate agents cannot lie to buyers without risking their license. Whether the seller instructed the agent to lie to you about the condition of the home, or whether the agent decided to lie so as to expedite the sale, this conduct is prohibited. For example, imagine that the seller tells the agent that he needs to sell the home quickly because termites are quickly eating through the porch. Obviously, this would be the sort of “adverse material fact” about which the agent would be legally obligated to inform the buyer. Or let's say the agent, through his or her own experience, notices that the window frames show sign of moisture damage. Again, the agent should have spoken up.
Even though the agent cannot explicitly lie, the agent still “owes no duty to conduct an independent inspection or discover any adverse material facts for the benefit of the [buyer] and owes no duty to independently verify the accuracy or completeness of any statement made by the [seller] or any independent inspector.” Thus, the seller’s agent does not need to verify his or her observation or knowledge of the property, or perform any sort of inspection. The agent simply cannot lie outright.
You may be thinking that Missouri’s requirements for disclosure sound fairly minimal, and you would be right. The seller is not required by statute to give you an extensive disclosure report outlining every known defect in the home. The agent is only required not to lie to you, and to tell you about any serious defects that he or she actually knows of—even though the agent has no obligation to conduct any sort of inspection to discover such defects.
Nevertheless, Missouri law does provide you with some potential causes of action against a seller or agent who failed to inform you about costly defects.
First, if you believe that the seller’s agent failed to reveal a defect about which he or she actually knew, you could report that individual to the Missouri Real Estate Commission (MREC). MREC is the state agency charged with licensing and overseeing agents. Even the threat that you might get MREC involved could cause the agent, or the larger real estate agency for which that specific agent works, to come to some sort of agreement with you before you make a formal complaint.
Note, however, that it can be very difficult to prove that a real estate agent actually knew about a defect and purposely never told you; the defect would have to be very obvious (in which case questions would no doubt arise as to why you didn't notice it yourself), or you would need to have some evidence that the seller told the agent to lie.
You may also have causes of action directly against the seller for fraud or breach of contract. Fraud is a cause of action under Missouri law that arises where one party made a knowingly false statement in order to induce another party to take an action. Imagine that the seller told you that termites in the home had already been exterminated. You buy the home on the basis of that representation. However, you soon discover that it was a lie; there are still termites, and the seller had made no efforts to eradicate them. This is fraud.
Similarly, you may have a breach of contract cause of action against the seller if the language of your purchase contract made certain guarantees. For example, your purchase contract might specifically state that the cracked windows would be replaced before the closing. If the seller failed to do this, then the seller has breached the contract. By definition, you did not get what you paid for when you bought the property. You would be entitled to monetary damages to cover the costs of upgrading the windows, which is precisely what you had bargained for.
In short, Missouri offers only limited protections to buyers of residential real estate. However, if you believe that you have found some nasty undisclosed defects, you should consider meeting with a Missouri real estate attorney who can advise you on an effective strategy to recover your losses.