Can You Sue a Home Seller for Undisclosed Defects in South Carolina?

What South Carolina homeowners should do upon discovering defects that they suspect arose before the sale.

A home has many parts, and when someone has already lived in it, is almost guaranteed to come with various defects. From a small defect like a broken garage door to a large defect like a busted electrical system, these can dramatically lower the value of a property. They can also cause stress and aggravation.

If you purchased a home in South Carolina, you surely hope that your property is free of any issues that you weren't warned about, so as to factor it into the price you paid. But what happens if you discover a problem that the seller never told you about before the sale? Under South Carolina’s disclosure laws, you may have legal recourse against the seller.

How Real Estate Disclosure Laws in South Carolina Help Purchasers Who Later Discover Defects

Before running to file a lawsuit, review South Carolina’s disclosure law, which is relatively short and readable. According to South Carolina Code § 27-50-40, the seller was required to “furnish to a purchaser a written disclosure statement” and it may be “delivered electronically through the Internet or other similar methods.”

The statute requires that the seller’s disclosure statement tell you about the condition of: (1) the water supply and sanitary sewage disposal system; (2) the roof, chimneys, floors, foundation, basement, and other structural components and modifications of these structural components; (3) the plumbing, electrical, heating, cooling, and other mechanical systems; (4) information about current or prior infestations of wood-destroying insects or organisms; (5) whether any zoning laws, building codes, boundary disputes, or easements affect the property; (6) the presence of lead-based paint, asbestos, radon gas, methane gas, or toxic material; and (7) whether there are any operable rental or lease agreements on the property.

Note that the statute applies not just to direct sales of residential property, but also to leases of property with an option to purchase. Buyers and sellers can also essentially contract around South Carolina’s statute: if the buyer and seller agree that no disclosure statement is required through a clause in the purchase contract, the seller cannot later be held liable for failing to make disclosures.

Chances are, you received a disclosure form that was modeled on one created by the South Carolina Real Estate Commission. The Commission’s sample disclosure form lays out all of the required statutory information and is commonly used by real estate agents and attorneys. The five-page form asks questions that comprehensively cover all of the statute’s areas of concern. The seller was required to answer “Yes,” “No,” or “No Representation” to each of these.

Per the statute, you should have received this document before the purchase contract was signed (probably from the seller’s real estate agent or attorney).

Can You Sue the South Carolina Home Seller for Undisclosed Defects?

Undoubtedly, if you discovered defects after you moved into the home, you are angry. You paid a certain purchase price under the assumption that the house was indeed worth that much money. Had you known about significant defects, you likely would have offered less money, or escaped the transaction entirely. You may have the urge to immediately file litigation.

Before you do, take a close look at the form. What, if anything, did the seller say about the problem that you just discovered? Two important reminders here: First, the seller needed to disclose only what he or she actually knew. The seller’s disclosure responsibilities did not include a duty to inspect the property. South Carolina Code § 27-50-40 is very clear that “conditions of the property of which the owner had no actual or constructive knowledge” are not included in the disclosure statement. A seller who did not know of a problem with the electrical generator, for example, had no responsibility to hire a mechanical engineer to come inspect the generator before giving the buyer the disclosure statement.

Second, you were reminded both on the disclosure form and in the legislation that you, the buyer, had a duty to inspect the property. South Carolina Code § 27-50-80 states that “This [law] does not limit the obligation of the purchaser to inspect the physical condition of the property and improvements that are the subject of a contract covered by this article.”

What if the seller said nothing about the defect, and it was one that the seller very likely was aware of? Fortunately, South Carolina has some helpful language for buyers who were tricked. South Carolina Code § 27-50-65 states that “An owner who knowingly violates or… discloses any material information on the disclosure statement that he knows to be false, incomplete, or misleading is liable for actual damages proximately caused to the purchaser and court costs. The court may award reasonable attorney fees incurred by the prevailing party.”

This means that if a seller failed to disclose a known material defect about the property, or gave a disclosure that was misleading, you can recover the costs of fixing whatever the defect is; perhaps a leaky roof, broken window, or whatever else. Moreover, the court can award you all court costs and attorneys’ fees required to bring the lawsuit. This is extremely helpful language!

Apart from the statutory cause of action, you may have two additional common law causes of action under South Carolina law: fraud and breach of contract. Fraud occurs when one party makes a statement that is knowingly false in order to induce another party to take an action. For example, imagine that the seller told you that the flooring was brand new. However, when you moved into the home, and saw the flooring without the rugs that the seller removed, you discovered that the tiles were all scratched and broken, and obviously old. This false statement was made to induce you into purchasing the house. This might constitute fraud.

You may also have a breach of contract cause of action against the South Carolina seller if the language of your contract made certain guarantees. For example, if your purchase contract specifically promised that the walls would be painted before you moved in, but they were not, this would be a breach.

What should you do if you discover a serious defect in your newly purchased South Carolina house? After you locate the disclosure documentation and gain a sense of whether the seller omitted material defects from the form, it might make sense to have a consultation with an attorney. The attorney might begin by writing a strongly worded demand letter to the seller, stating the problem and making a request for payment. Often, this sort of a formal demand letter can at least provoke some settlement discussion. If the seller still refuses to respond or negotiate, it may be time for a lawsuit.

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