Most states require home sellers to give buyers a written defect disclosure form before the sale closes. This form would typically address any known problem with the home or the surrounding property that might concern a potential buyer. The states’ purpose with such legislation, of course, is twofold. First, they want to encourage honesty in the pre-sale dealings between the buyer and seller. Second, they want to give the buyer legal recourse against the seller--a specific civil action--if the seller purposely fails to disclose serious defects and tricks the buyer into purchasing the property.
As a West Virginian homebuyer, the bad news is that your state lacks this statutory protection. No law in West Virginia required the seller to give you a formal disclosure, and no law gives you a specific cause of action against a seller for “omitting” to disclose a defect.
Given this lack of legislation, what recourse, if any, might you have if you discover a big problem with the property after you buy it?
As we know, West Virginia does not have law that requires sellers to give a formal disclosure statement to a potential buyer. Instead, West Virginia 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.
For example, if you buy a home and then discover that the basement is flooded or that the garage door does not close all the way, the courts will not allow you to sue the seller merely because the seller never explicitly told you about these problems. The burden falls on you, as the buyer, to perform an inspection. If you buy the house anyway, the courts essentially hold that you are stuck with it as is.
If your seller used a professional real estate broker to sell you the house, however, there are at least some regulations around disclosures of property defects. The West Virginia Real Estate Commission (WVREC) is the state agency charged with overseeing the real estate market and licensing real estate agents.
The West Virginia Real Estate License Act § 30-40-19 states that WVREC “shall have full power to refuse a license for reasonable cause or to revoke, suspend or impose any other sanction” against a real estate agent if the agent makes “any false promises or representations of a character likely to influence, persuade or induce a person involved in a real estate transaction.” Agents are not permitted to make “any material fraud, misrepresentation, concealment, conspiracy, collusion, trick, scheme or other device whereby any other person relies upon [the agent's] word, representation or conduct.”
Keep in mind, however, that WVREC does not require the agent to perform a complete basement-to-roof investigation of the home before approaching buyers, nor does it require the agent to hire a professional inspector to investigate potential physical defects. The agent merely cannot make a misrepresentation in order to capture a sale.
You might be thinking that West Virginia’s lack of regulation around disclosure does not sound particularly promising for you. After all, how could you make any legal threats for a home seller failing to tell you about a major defect if there was no legal obligation to do so? You are correct that it may be an uphill battle. But there are a few potential avenues to explore.
First, you might have a cause of action against the seller for fraud. Fraud results from one party making a statement that is knowingly false to induce another party to take an action. For example, imagine that the seller was showing you the house, and told you that he had recently installed a pool in the backyard, which appeared to be covered by a tarp. When you move into the house, you discover that the “pool” was merely a hole in the ground. He clearly tried to trick you into buying the property, and likely even increased the price based on this “amenity.” Here, the seller would be liable for fraud, because he made a knowingly false statement to induce you to buy the house.
Second, you may also have a breach of contract cause of action against the seller if the language of your contract made certain promises. For example, your purchase contract might specifically state that the entire house will be freshly painted before the closing. If you move in, and find the same cruddy old paint, this is a breach of the seller’s contract.
Moreover, notwithstanding West Virginia’s lack of legislation requiring sellers to issue a formal disclosure report before the sale, sellers sometimes still will issue disclosure forms. If the seller gives you a disclosure form that makes a certain representation, this too could be considered an aspect of the contract.
Finally, if a real estate agent was involved, consider whether he or she lied to you. Remember West Virginia Real Estate License Act § 30-40-19. For example, imagine an agent tells you that a house just had all new plumbing installed, but you later discover that the pipes are old and corroding, and will cost you tens of thousands of dollars to repair. The agent risks tremendous liability from the WVREC, including fines and loss of his or her license.
If you discover the defect in your new property, you should immediately write to the seller, broker, or both, stating the problem and outlining your damages. Demand letters can sometimes make a potential defendant willing to settle a dispute early on. An agent might prefer to pay you a small sum, rather than face investigation by the WVREC if you were to file a complaint. Similarly, the seller may prefer to pay you directly, rather than hire a lawyer to defend a lawsuit. If the amount of your damages is significant, you should consider a consultation with a real estate attorney.
Even though West Virginia does not have buyer-friendly legislation to protect unknowing purchasers like yourself, you might be able to recover some money from the seller or the seller’s agent using these mechanisms.