New Hampshire’s state motto is “Live Free or Die”--an enthusiastic ethos, but one that often rejects excessive government regulation. Not surprisingly, then, New Hampshire law requires relatively minimal disclosure of defects from home sellers to buyers before the sale.
So what happens if you purchase a home in the Granite State and find a nasty surprise? For example, imagine that you’ve just taken out a mortgage and paid a significant down payment on your dream house in Hanover. The seller and his real estate agent assured you during the walk-through that there was no required maintenance, and that the property was in essentially perfect condition. But then, when fall turns to a chilly New England winter, you realize that the home’s heating system is useless. A mechanic tells you it would cost thousands of dollars to replace or repair. Does New Hampshire Law allow you to recover any money from the seller to cover the cost of the repairs?
Before thinking about your potential remedies against the seller, you should familiarize yourself with the legal obligations that the New Hampshire home seller had to you prior to the sale. Most states have legislation that would require a home seller to have given you a written disclosure report of known defects before the sale. Such reports typically identify any “material defects,” which is another way of saying “serious problems” with the property. These range from a defective refrigerator to a leak in the attic. In New Hampshire, by contrast, no law requires the seller to disclose these sorts of defects. Indeed, the disclosure law is limited to a few specific aspects of the home.
What should the seller have communicated to you before the sale? The disclosures required by New Hampshire are very limited. N.H. Rev. Stat. Ann. § 477:4-d requires that prior to any offer of sale by the buyer, the seller must disclose in writing: (i) Information about the type of private water supply system, including its location, malfunctions, date of installation, date of most recent water test, and whether or not the seller experienced any problems with it; (ii) Information about the private sewage disposal system, including its location, malfunctions, the date it was most recently serviced, and the name of the contractor who services the system; and (iii) information about the home’s insulation, including its type and location.
New Hampshire’s legislature is clearly concerned with defects in private water and sewage systems. (If the property uses public systems, these requirements may not even apply).
Moreover, N.H. Rev. Stat. Ann. § 477:4-a requires that the seller give the buyer certain notices about radon gas, lead paint, and arsenic. These are generally just warnings, notifying you that the home may contain certain environmental hazards.
Beyond these specific requirements, New Hampshire lacks any broader law that requires home sellers to give you a formal disclosure statement about physical defects to a potential homebuyer. Rather, the state’s courts 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.
Despite the lack of broader legislation on disclosure and the caveat emptor doctrine, New Hampshire does have some relevant regulations around disclosures of property defects when a real estate agent is involved in a transaction. N.H. Rev. Stat. Ann. § 331-A:25-b says that the seller's agent's duties include treating all prospective buyers honestly and "disclosing to a prospective buyer or tenant any material physical, regulatory, mechanical, or on-site environmental condition affecting the subject property of which the licensee has actual knowledge.” This disclosure must be made before the buyer makes a written offer to purchase the property.
What does this mean in practical terms? If there was a real estate agent involved in the transaction, that person had a legal duty to tell you about any defects about which he or she was aware. Whether the seller told the agent off-handedly about the problem, or whether the agent noticed it during his or her own visits to the property, the agent should have informed you.
Importantly, though, the statute also says that nothing in the law creates an "affirmative obligation on the part of the [agent] to investigate material defects.” This means that the real estate agent does not need to perform any sort of inspection or receive any formal reports before attempting to sell your home. Essentially, the agent is required to disclose to the buyer only what was manifestly obvious or what the seller actually mentioned about the property.
Buyer's Potential Remedies For Undisclosed Defects in New Hampshire Home
If you discover an undisclosed material defect in your New Hampshire home following the sale, what should you do?
The first question is whether the defect relates to any of the environmental hazards (radon, asbestos, and so on) or water/sewage systems that required the seller’s disclosure. For example, if the sewage system is defective and requires all new tanks and piping, and the seller never disclosed these problems, you might have a cause of action against the seller under the disclosure statute.
If the defect related to a different area of the home; perhaps a leaky roof or an unstable foundation; consider whether a real estate agent was involved in the transaction. Do you believe that the agent knew about the problem and intentionally failed to disclose it to you, in order to expedite the sale? If so, you might have a cause of action against the agent directly. You could also report that agent to the New Hampshire Office of Professional Licensure and Certification, a state agency that licenses and sanctions real estate professionals. This possibility alone might prompt a real estate agency to make a settlement offer with you against the value of your repairs.
Moreover, beyond these specific statutes, you may have a legal cause of action against the seller for breach of contract or fraud, depending on the circumstances of the sale. Fraud is a common law cause of action in New Hampshire that results from one party making a statement that is knowingly false to convince another party to take an action. Imagine that the seller told you that he just had the roof repaired and retiled. But when you move in, you realize that there are constant leaks and that the roof has not been fixed in years. Evidently, 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 purchase contract made certain guarantees. For example, your purchase contract might specifically state that certain windows would be upgraded or other repairs made before the sale. If this turns out not to be true, the seller may be in breach.
Thus, while New Hampshire lacks extensive disclosure laws, you do have potential tools in your legal toolbox to seek justice. If you discover undisclosed defects in your home, contact a New Hampshire attorney. That attorney--ideally one with experience in real estate litigation--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. And if it does not, your attorney can advise you on whether or not litigation against the New Hampshire home seller could be effective.