Washington, DC is known as a city of secrets, with politicians often keeping their cards close to their chests. But when you’ve bought a home there, you expect full and frank disclosure from the seller about any problems with it. Are the pipes corroding? Is the foundation sturdy? Do the lights work? In DC, the seller is required to make disclosures to buyers regarding known defects before the transaction is complete. As a home buyer, what is your remedy if you discover--perhaps after many months or even years--that the seller failed to make such disclosures?
Before buying the home, you hopefully completed significant due diligence, hiring a professional home inspector, title insurance company, and perhaps a real estate attorney. Even so, the obligation to discover defects in the home should not have rested entirely on your shoulders. In the District of Columbia, home sellers are required to provide buyers with a formal Disclosure Statement.
DC Municipal Regulations 17-2708 requires the seller to make certain explicit disclosures of home defects to potential buyers. An example of the Disclosure Statement can be found on the Secretary of the District of Columbiawebsite. A seller must disclose 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.
The purpose of requiring this form is simple: It encourages free and open disclosure. While thoughtful disclosure of defects may lower the price a seller can charge for the home, it also reduces the possibility of expensive lawsuits by buyers claiming that they had no notice of certain defects.
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 Statement 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.
If you discover a significant defect with your DC home following the closing, and your seller failed to disclose it before that date, you might be able to seek recovery from the seller in court. Most likely these claims would be filed with the District of Columbia Superior Court. Your causes of action might include, for example, breach of contract, breach of the duty of good faith, and potentially fraud.
DC 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 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.
You may have heard the phrase “caveat emptor,” which is Latin for “buyer beware.” This legal doctrine--largely outdated in the case of home sales--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. DC does not, as we see from the extensive disclosure requirements. Some sneaky sellers will nevertheless 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, DC courts generally frown upon the use of “as is” clauses to avoid liability for fraudulent concealment of a known defect. If, for example, the seller knew that the plumbing was defective, failed to disclose the condition, and included an “as is” clause, a court might allow the buyer to seek monetary damages against the seller following the closing.