Purchasing a home is a big decision for an Ohioan. As a responsible buyer, you do your due diligence and research the home, purchase title insurance, and retain a competent attorney to represent you. While buyers know that homes may not be perfect, they generally expect that the seller would warn them of any known material defects in the home. Under Ohio law, in fact, sellers must disclose any material defect about which they are aware before the sale is complete.
If you discover a significant defect with your home following the closing, you might be able to seek recovery from the seller in court.
Ohio law requires sellers to make certain explicit disclosures of home defects to potential buyers under Ohio Revised Code Section 5302.30. The seller of residential real estate is legally required to complete a form—known as the Residential Property Disclosure Form (“RPDF”)—disclosing conditions and defects with the property, and provide it to a potential buyer.
As a buyer, you should make sure that your seller (or potential seller) actually gave you a completed RPDF before you closed on the sale. A blank copy of the form can be found through the Ohio Department of Commerce website. Note the bold text on the front page of the form, encouraging potential purchasers to hire their own home inspectors regardless of any disclosures made or not made by the owner.
The purpose of requiring this RPDF is simple: It encourages free and open disclosure. While thoughtful disclosure of defects may lower the price a seller can charge for the home, the disclosure also reduces the possibility of expensive lawsuits by buyers claiming that they had no notice of certain defects.
Reading the RPDF, you will see that the seller should have disclosed—and possibly did disclose—to you any and all known material defects with respect to critical aspects of the home (such as water and sewer systems, electrical systems, structural support, code violations, and so forth). Minor issues, such as loose doorknobs or paint scratches, do not warrant disclosure. Read more about an Ohio seller’s disclosure obligations.
You have probably heard the phrase “caveat emptor,” which is Latin for “buyer beware.” This legal doctrine holds that the seller has no duty to make disclosures to the buyer; if there are defects in the home, it is the responsibility of the buyer to conduct an inspection and find them before paying the purchase price.
Today, few states still adhere to a strict application of caveat emptor. Ohio, as we known from the RPDF requirement, does not. Ohio only observes the doctrine in circumstances when the defect is open to observation or discoverable upon a reasonable inspection, and the buyer had an unimpeded opportunity to inspect the premises. For example, if the house had a huge hole in the side of it, and the buyer still purchased it, the buyer could not later claim that the defect was not explicitly disclosed.
Many sellers will try to include the “caveat emptor” concept as a clause in the purchase agreement for the home, sometimes in the form of an “as is” clause. An “as is” clause essentially states that the buyer takes the home as it currently exists, without any expectations or promises by the seller about its quality.
Unfortunately for sellers, Ohio courts generally frown upon the use of “as is” clauses to avoid liability for the fraudulent concealment of a known defect. If, for example, the seller knew that the HVAC system was shoddy, failed to disclose the condition, and included an “as is” clause, a court might allow the buyer to go ahead and seek damages against the seller.
Ohio sellers can be held liable 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 the buyer, 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 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 a crack in the foundation that was hidden behind some structure, or clogged sewer pipes, might be more difficult to prove the seller's knowledge of.