As a home buyer, you hope that the Vermont property you have selected will be in good condition: no leaks in the roof, a sturdy foundation, and free from environmental toxins. But sometimes, you may get tricked into overlooking important defects before closing on the sale. Indeed, home sellers have been known to intentionally “forget” to mention critical problems, or explicitly lie about the home’s condition.
If you buy a home in the Green Mountain State, and then discover a problem after you move in, do you have any legal recourse against the home seller?
Most states have extensive and broad laws that force sellers of residential properties to give disclosure forms to buyers. These forms set forth every known material defect with the house, focusing on those that affect its overall value. If a seller fails to make disclosures in this manner, many states will hold the sellers liable for resulting damage to the unsuspecting buyer.
Vermont lacks this sort of comprehensive disclosure requirement. But it does have some more granular requirements, particularly around the presence of lead paint, which was commonly used prior to the 1980s, and can lead to various health problems, particularly for children and pregnant women. The Vermont Lead Law required your seller to disclose to you any known information about lead-based paint and lead-based hazards before selling the house. Purchase contracts must include an extensive disclosure form about lead-based paint. Moreover, buyers have up to ten days to check for lead hazards after signing the purchase contract.
If the seller used a licensed real estate agent to sell the property, then Vermont provides greater regulations. Vt. Admin. Code 20-4-1800:4.5 requires a real estate agent to “fully and promptly disclose to a prospective buyer all material facts within the [agent’s] knowledge concerning the property being sold.”
For example, if the agent knows that the roof is leaking, or that the seller does not actually have full title to the property, or that the water on the second floor does not work, he is required to tell you that. This same law prohibits the agent from lying on behalf of the seller, or repeating any lies that the seller told.
As a buyer of a property with a defect, what remedies might you have against the seller? As you can see, there is no overall legislation that protects you from the seller’s omissions. So the answer largely depends on the specific type of defect, and the circumstances under which the seller revealed it to you (or failed to reveal it to you).
First, in the event that your concern is related to the presence of lead in the home, the Vermont Lead Law is extremely helpful to you. Check to see whether you received the required disclosures from the seller before you signed the purchase contract. Then, if you are within the ten-day window following the signing of the contract, you or your attorney should write to the seller with notice of the violation of Vermont’s lead law.
Second, consider whether the seller used a real estate agent and whether that agent lied to you during the course of your relationship. If so, Vt. Admin. Code 20-4-1800:4.5 will offer some assistance. The Vermont Real Estate Commission’s Office of Professional Regulation, a division of the Secretary of State, is charged with ensuring that agents maintain high standards of honesty in dealing with consumers.
If a buyer gets hurt by a real estate agent’s failure to disclose a material fact about the property, that agent runs the risk of being punished by the Commission, for example by having his or her license suspended or revoked. As a buyer, you may have some leverage to ask the seller’s agent for reimbursement for your damages; that is, the cost of correcting the issue at the heart of the misrepresentation. If the agents refuses, you or your attorney might report the agent for unprofessional conduct.
Finally, putting aside liability based on lead paint or the real estate agent’s lies, you may still have a cause of action against the seller for breach of contract or fraud, notwithstanding Vermont’s lack of general disclosure legislation. Fraud is a common law cause of action that results from one party making a statement that is knowingly false to induce another party to take an action. Imagine that the seller told you that he would have all the asbestos abated 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 furniture would be included, or certain windows upgraded before the sale. If this turns out not to be true, the seller may be in breach.
Additional breaches of contract could flow from the seller’s voluntary disclosures. Even though Vermont does not require sellers to make formal disclosures, some sellers will make them anyway. The Vermont Realtors’ Association offers one popular form online, which asks the seller to check “Yes,” “No,” or “Don’t Know” in response to a few dozen questions about the property. If, for example, the seller says affirmatively that there are “no easements” on the land, but you later discover that the seller was fully aware that your neighbor has an easement to use your driveway to access his or her property, this might constitute fraud. The seller likely tried to mislead you into thinking that you were buying title free and clear, when in fact, you were not.
As soon as you discover defects in your new home, act quickly. 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.
If the amount of your damages is significant, consider a consultation with a real estate attorney. 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.
It is true that Vermont lacks buyer-friendly legislation relevant to home purchases. However, using these various mechanisms, you might be able to recover some money from the seller or the seller’s agent under certain circumstances.