Legal Remedies If a Home Seller Lies or Conceals a Defect in Georgia

If your Georgia home contained unpleasant surprises, here's what to do next.

Georgia can be a great place to live, especially if you’ve recently moved into a newly purchased home. But what if a record-breaking heat wave hits, and you turn on the central air conditioning unit only to find that it doesn’t work? You’re hot, grouchy, and probably mad at the home seller for not advising you of this defect.

Can you go after a Georgia home seller for the cost of a new air conditioning unit or other undisclosed home defects? This article will discuss your options and legal rights.

First, the Buyer Must Prevent Any Further Damage

If the problem with the home is something that can result in further damage to the home if it’s not fixed promptly, the first thing a Georgia buyer must do is address this issue.

The seller will not be responsible for any damage caused to the home after the buyer discovers the problem. For example, if you find a leaky window that drips onto the wood floors, you must call a repairperson, wipe up the moisture, turn on a fan, or do whatever it takes to stop the leaks from causing further damage to the floor.

For future reference, however, be sure to take pictures or videos of the problem before your preemptive measures, and of any damage already caused by the problem at the time you discover it. Also keep detailed documentation of any amount you spend to fix the problem so that no further damage occurs, and get estimates from professional contractors of the cost to fully repair the problem. You will need these documents in any insurance claim, or in any legal case against the seller later.

Will Your Homeowners' Insurance or Home Warranty Cover the Problem?

The quickest and easiest way to resolve the problem might be to leave the seller out of it, and get help through your insurance company or home warranty company.

Check the terms of your homeowners' insurance, and speak to your representative if you have any questions. Realize, however, that the primary purpose of homeowners' insurance is to protect against unexpected events and damage, not wear and tear -- so in the end, you may not be covered.

If you received a home warranty at the time of your purchase (covering home appliances and systems), pull out this documentation as well, and check the terms. If the problem is covered by the warranty and you are within the warranty period, follow the procedures set out for requesting service. But beware of exceptions for preexisting conditions that might cause the warranty company to refuse to respond to the issue.

What Did the Seller Disclose About the Home?

Whether or not the seller is responsible to fix the problem depends on what the seller previously disclosed to you about the condition of the property.

Under Georgia law, a seller must inform the buyer about any known material defects in the condition of the home (a “material” defect is basically anything that would cause a buyer to pay less for the home, or not purchase the home). However, the seller need not have disclosed anything that you could have discovered upon a reasonable inspection of the property.This exception applies only to things that are obvious from just looking around the home -- for example if there is a huge hole in the middle of the floor, the seller does not need to specifically point it out.

Georgia sellers must also honestly answer buyers’ questions about the home. (For more information on what a seller in Georgia must disclose, see Nolo’s article “Home Sellers in Georgia: Disclosures Required Under State Law.”)

To meet their disclosure obligations, most Georgia sellers provide the buyer with a disclosure form prior to selling a home. Take a look at any disclosure statement you received from the seller. There's a good chance the seller informed you of the condition of the item on the disclosure statement, in which case, by completing the purchase and sale, you agreed to the condition of the home as described in the disclosure statement. If, for example, the seller noted on the disclosure statement that some of the windows leaked or that the air conditioning system was not working, you cannot hold the seller responsible for such problems later.

What Did the Seller Actually Know?

If you discover a problem with the condition of the home that was not disclosed to you prior to buying, the seller may still not be responsible if he or she knew nothing of the defect. For example, if the seller thought the air conditioner was okay because it had always worked fine right through the last time he or she used it, the seller would have been justified in disclosing nothing about the condition of the air conditioning, or even saying on the disclosure statement that the air conditioner worked fine.

Holding a Seller Responsible for Known, Undisclosed Defects

If your seller in Georgia did know about a material defect with the condition of the home and did not disclose it, or gave you false information about it, you might have a legal claim against the seller. A buyer in this situation could potentially bring a lawsuit based on theories of breach of contract, misrepresentation, or fraud.

If, for example, you could show that the seller intentionally lied about the condition of the air conditioning unit, or knew about the leaking windows and conveniently “forgot” to tell you about them, you may have the basis for filing a lawsuit.

Bringing suit against a seller, however, is generally expensive and time consuming, and the outcome is uncertain. The buyer must prove that the seller actually knew of the problem, and that the seller either lied about it or did not disclose it as required under Georgia law. It may not be worthwhile to bring a suit unless the problem with the home is either impossible or very expensive to fix, and the facts of the case are strongly in the buyer’s favor.

In the case of an air conditioning unit, for example, it’s probably not worth starting a lawsuit, which could easily cost you more than simply buying a new air conditioning unit.

The analysis might be different if, for example, the seller knew the home was chock full of toxic mold, and the cost to fix it would be almost as much as the value of the home. The ideal for a successful court case in this instance would be if the buyer found out about the problem by discovering, in an overlooked corner of the closet, a file containing inspection reports informing the seller of the mold problem, and estimates showing the exorbitant cost to fix it.

If, as a Georgia buyer, you do decide to pursue legal action against the seller for a problem with the home, act quickly. In Georgia, any claim for breach of contract must be brought within six years of discovery of the defect (Official Code of Georgia Annotated §9-3-24). Any claim for negligent construction or fraud must be brought within four years after the claim arises (Official Code of Georgia Annotated §9-3-30).

Buyer’s Remedies After a Successful Lawsuit Against a Seller

If a buyer in Georgia successfully sues a home seller, the remedies the buyer can expect depend on the facts of the case.

In some instances (usually fraud or misrepresentation) the buyer may have an option to rescind the purchase contract. With rescission, the court attempts to put the parties back in the position they were in prior to signing the contract, basically meaning you’d get your purchase price returned, and the seller would get the home back. Alternatively, the buyer may be entitled to receive the payment of damages from the seller. Damages awarded are generally the cost of the repair, or if it is a problem that cannot be fixed, the reduced value of the home with the defect.

In any event, if you are considering a lawsuit, you should first notify the seller about the problem and the possibility that you will take legal action. By laying this out in a letter, explaining in detail the problem you’ve discovered and why you believe the seller is responsible for fixing it, you may resolve the matter without a lawsuit. It’s helpful to include any estimates by professional contractors documenting the cost of fixing the problem, as well as photos of the defect, if possible. Ideally, the seller will offer to reimburse you the cost, or part of the cost, to repair the problem.

Where to Get Help

If you encounter an issue with the home that you believe should have been disclosed to you prior to your purchase, you may wish to consult an attorney in your area for help in determining how to proceed. Of course, you’ll want to resolve the problem as soon as possible, so you can enjoy the Georgia lifestyle in cool comfort.

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