Can You Sue a Home Seller for Undisclosed Defects in Wyoming?

Possibilities for holding a seller liable in a state that doesn't have a seller disclosure statute.

Imagine that you purchased a Wyoming home believing everything about it was perfect--or at least was something you could live with--and then closed on the transaction. You moved in, and soon made some unfortunate discoveries. Maybe the major appliances don’t work, or you notice flooding in the basement, or cracks in the foundation.

Naturally, you are upset. You may also wonder whether you have any legal remedies against the seller. In what circumstances does Wyoming law allow you to sue the owner of the home who sold it to you?

Real Estate Laws and Regulations in Wyoming Regarding Home Defects

You might assume that there would be clear legislation in Wyoming that would allow you to sue a home seller for major defects you found after the closing. Unfortunately, Wyoming courts enforce the doctrine of  caveat emptor. Under caveat emptor (“let the buyer beware”), judges ordinarily refuse to compensate buyers for defects found after the purchase unless the seller did something to actively prevent the buyer from inspecting the property to find all of the defects, or lied directly about the property’s condition.

A Wyoming home seller may therefore have had no affirmative duty to tell you that there was asbestos in the ceiling, or that the refrigerator stopped working years ago. A seller who did not prevent you from inspecting the property and did not lie directly--for example, by telling you that all the asbestos was removed last year--is not liable.

In short, the legal burden for prepurchase investigation falls on the buyer. This stands in contrast to  most states, which have clear legislation requiring a seller to give a written disclosure report to potential buyers listing every known defect about the property, and to be subject to legal liability if they fail to deliver that report or to fill it out completely and honestly.

Notwithstanding the lack of legislation on disclosure and the caveat emptor doctrine, Wyoming  does  have some regulations around real estate sales when the seller uses a licensed real estate agent.

Pursuant to  Wyoming Code 33-28-303, licensed real estate brokers must disclose to any prospective buyers "all adverse material facts actually known by the broker.”

Material facts are generally considered to be facts related to the title or physical condition of the property that would make a reasonable person reconsider the purchase. The regulations prohibit a broker from perpetuating any "material misrepresentation of the seller which the broker knows or should know is false.”

This is a legal-jargon way of saying that any licensed Wyoming real estate agent has a legal obligation not to lie to a buyer. If the agent knows that the house has asbestos in all of the ceiling tiles, for example, the agent cannot tell you that the asbestos has long ago been abated. The agent also cannot reiterate any lies that the seller may have told you, if the broker knows those statements to be false. (Keep in mind, however, that the agent has no legal duty to inspect the property himself or herself to make sure that the seller’s statements to you are true.)

Remedies Available to Buyers

Unfortunately, there is no statute directly protecting you from your seller’s failure to disclose a material defect in the property. Still, you have some potential legal remedies if you find that you’ve purchased a home with expensive problems.

First,  Wyoming Code 33-28-303  exposes brokers to censure or license revocation by the  Wyoming Real Estate Commission, the state agency charged with overseeing real estate licensing and enforcing real estate laws. If a buyer is lied to by a real estate agent, that agent runs the risk of being punished by the Commission, for example by having his or her license suspended or permanently revoked. This is a high price to pay, and most agents are unwilling to risk their entire career by lying to a prospective buyer.

If you believe that the real estate agent lied to you, you can have your attorney bring this statute to the agent’s attention. The agent may be willing to pay a settlement (or may have professional liability insurance), rather than face either a complaint to the Wyoming Real Estate Commission or litigation.

Second, you might still have a legal cause of action against the seller for fraud.  Fraud  is a common law cause of action that results from one party making a statement that is knowingly false to induce a party to take an action.

Imagine that you told the seller that you were considering buying his house, but were concerned about the old foundation and wanted to make sure it was structurally sound. The seller then told you, “Oh, it’s totally sound; I just had it inspected last month.” In fact, you later learn, the seller never had it inspected and it was crumbling. Here, the seller would be liable for fraud, because he made a knowingly false statement to induce you to buy the house. (Note that this is different from a situation where the seller simply does not mention the foundation at all).

Finally, you may also 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 all major appliances are in good working order at the time of the sale. If the seller makes that promise in the contract, but it turns out that one or more of the major appliances are busted, the seller may be in breach.

Once you discover the defect in your home, you should not sit on your hands. Immediately write to the seller, broker, 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, you should 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.

In short, while Wyoming lacks buyer-friendly legislation relevant to home purchases, you might be able to recover some money from the seller or the seller’s agent under certain circumstances.

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