As a homebuyer in Minnesota, you no doubt expected to get the full benefit of your bargain. After all, you searched for your property, secured financing, and went through the difficult mechanics of closing. The last thing you would want is some sort of nasty surprise about the condition of the property after the closing is behind you. For example, imagine discovering that the HVAC system is shot as soon as you try to turn on the air conditioning. Or imagine setting up a barbecue on your porch, only to realize that there is a massive termite infestation that has been eating away at the porch’s foundation. Now imagine that the seller knew about these issues, but never told you about them before the sale. Does Minnesota law give you a remedy if you discover—perhaps after many months or even years—that the seller failed to make such disclosures?
Minnesota requires that the home seller give you a disclosure form before the purchase contract is signed. This disclosure places the burden on the seller of the home to disclose a wide variety of conditions about the property. Its purpose is to put you on notice of these defects well before closing, hence giving you an opportunity to inspect the conditions, renegotiate the sale, or back out entirely.
Minnesota Statutes § 513.55 broadly covers disclosure statements. The law says, in relevant part: “Before signing an agreement to sell or transfer residential real property, the seller shall make a written disclosure to the prospective buyer. The disclosure must include all material facts of which the seller is aware that could adversely and significantly affect: (1) an ordinary buyer's use and enjoyment of the property; or (2) any intended use of the property of which the seller is aware.” Further, the law states that the disclosure “must be made in good faith and based upon the best of the seller's knowledge at the time of the disclosure.”
In short, the law requires that the seller of a home must give a written disclosure—i.e., not oral—detailing any material facts of which the seller is aware that negatively affect the property. The requirement of “good faith” written into the legislation signifies the legislature's intent to prevent sellers from engaging in unscrupulous conduct or misstatements.
In response to this law, the Minnesota Bar Association created a standard nine-page Disclosure Form. The home seller must fill it out and certify that the information presented is accurate as of the date of the form. Moreover, the seller must disclose whether he or she possesses any contradictory inspection or engineering reports that show defects with the home. This is the disclosure form that you should have been given before you purchased your home.
If you discover a defect in your home after the sale has closed, you should dig that seller disclosure form out of your drawer. Did your seller actually give you the completed Disclosure Form before you closed on the sale? If so, was the particular defect you're now experiencing disclosed? If it was disclosed—even in general terms—you would have been on notice that there was an issue that you should have inspected or otherwise examined further or negotiated over before buying.
Many buyers are disappointed to discover that the disclosure was, in fact made, but that they didn't pay close enough attention to the form. It does, after all, contain a couple dozen specific questions of the seller. For example, the seller must state the year he or she purchased the house; whether pets have lived there; and whether there have been any structural replacements. The seller must further answer specific questions about nearly every specific aspect of the home, from the tiling to the air conditioning to the roofing. Finally, the disclosure form asks for various environmental disclosures, such as whether there is known asbestos in the home, as well as any water or air contamination. Indeed, Minnesota’s Disclosure Form is unique in its level of specificity.
Or perhaps you will discover that the issue you're experiencing wasn't even specifically asked about on the form. Don't worry, you're not out of luck: The disclosure form also gives the seller an open-ended prompt to disclose: “All material facts of which the seller is aware that could adversely and significantly affect: (1) an ordinary buyer's use and enjoyment of the property; or, (2) any intended use of the property of which the seller is aware.” If it's something minor, the seller could rightfully have left it off the form (a loose doorknob, for example). But if it's a defect that could significantly impact your use and enjoyment of the property, the seller should have found a place to insert it on the form.
If you discover a significant defect with your Minnesota home following the closing, and your seller failed to disclose it before that date, you might be able to seek recovery in court. Most likely these claims would be filed in theMinnesota District Court, in the district where you live. Your causes of action (bases for a lawsuit) might include, for example, breach of contract, breach of the duty of good faith, and potentially fraud.
Minnesota sellers can be held liable under the statute for failing to disclose a material defect. For example, if a seller knew that whenever it rains, the basement quickly floods, but failed to disclose this information, the buyer who discovers this can potentially sue.
For you, as the homebuyer, the legal challenge will be showing that the seller in fact knew about the existence of the defect. A major defect like the flooding of the basement would likely be easy to show the seller's prior knowledge of, based on evidence of past flooding, records from repair people who visited the house at the request of the previous owner, and so on.
A more minor or hidden defect, like mold behind the sheet rock, or leaking sewer pipes, might be more difficult to prove the seller's knowledge of.
Whatever the situation, be sure to take photographs and gather any relevant forms of evidence as soon as possible. These will help a lawyer evaluate the strength of your case and may ultimately serve as evidence in court.