After many years living in a nice suburban home, I am now trying to sell and move to the city. It’s a well-maintained home in a safe area, with great public schools and clean streets. In theory, I should be able to make a good profit.
Just one problem: I live next to an annoying family with a loud teenager. He has a band with other local kids, and has frequent loud parties (some of which go past midnight) and plays loud music. Next week, I have a prospective buyer coming to look at my house. I’m afraid all of that chaos might scare her away. If I tell his parents to keep him quiet during the buyer’s visit, am I committing fraud?
Everyone who sells a home has an incentive to make the place look as nice as possible. You vacuum the living room, put air freshener around the bathrooms, and mow the lawn. You might even repaint the house entirely to cover up old scratches and dings, and perform some maintenance tasks that you've been putting off.
It's one thing to make repairs and cosmetic changes, however, but another to cover up an existing and ongoing problem. Sellers have a duty to disclose any material issues related to the home. Disclosure requirements vary by state, but generally, a seller would need to disclose any defects about which they have personal knowledge (for instance, a wobbly foundation or current termite infestation).
In your case, you hope to keep the neighbors quiet to prevent the buyer from discovering that they will live next to some truly noisy kids. Understandably, you're worried about committing fraud with this silencing. After all, if you sell your home by lying to the buyer – for example, intentionally failing to reveal certain flaws in the house – the buyer might have grounds to sue you for damages, or even unwind the transaction entirely.
Fraud is usually defined as an intentional misrepresentation of a material fact made with knowledge of its falsity, and made with the specific purpose of inducing another person to act, resulting in injury to that person.
Here, you want to tell a neighbor to make sure that their teen is on best behavior. You are not directly lying to the buyer, inducing the buyer to make a purchase based on false information. You’re merely asking for a neighborly courtesy.
This situation might be different, however, if you told the buyer explicitly that there were no loud neighbors or teens in the area, or failed to mention the noise on the disclosure form. That would be a misrepresentation made with the intent of inducing the buyer to purchase your home.
Regardless of whether the buyer would have a cause of action for fraud after the sale, you might want to consider the consequences of telling the neighbors to keep quiet. What if the buyer returns to your neighborhood to inspect at a different time, when the noise is louder? What if the neighbor, out of spite, allows their teen to make additional noise? What if the buyer discovers your actions? In home sales, as in most areas of life, being honest and truthful saves work in the end.