Caveat Emptor is a Latin phrase you sometimes hear in real estate transactions. It translates to English as let the buyer beware. If you are buying or selling property, this ancient principle affects you.
As a buyer, you can and should inspect the property you want very thoroughly and carefully before you sign a contract. The best time to find problems is before you commit to a contract. As a buyer, it is your responsibility to find any problems that matter to you, such as plumbing or electrical issues. Better to go to contract with your eyes open than to get into a legal fight with the seller after the fact.
While the burden is on the buyer to find problems that a thorough inspection would reveal, there is no corresponding obligation for the seller to point out defects in the property being sold. If a buyer does not notice a visible crack in the foundation until after the closing, for example, the buyer cannot sue the seller for having sold a defective house. Sellers have no duty to say anything, good or bad, about their property.
But if a seller actively conceals a defect, that could be considered fraud, and a buyer could make a claim against the seller later on.
That is what happened in the case of Striplin v. AC &E Home Inspection Corp., decided in July 2023. The plaintiff buyers bought a house in Suffolk County, and after the closing, they discovered extensive damage due to leaking water. The Supreme Court judge dismissed their case, invoking the “buyer beware” doctrine.
On appeal, however, the lower court’s decision was reversed, and the case was allowed to proceed. The Appellate Division held that the “buyer beware” doctrine generally applies, but it does not protect a seller who takes affirmative steps to conceal a defect. In this case, the seller covered up the water damage by covering damaged and rotted wood with new wood, such that the serious damage was hidden and impossible to detect.
This action by the seller, said this court, constituted fraud by the seller, and the buyers had a valid claim for that. The buyers still had to prove their case, and they were entitled to a chance to do so. It was wrong to dismiss the case outright.
There are lessons for both sides in this case. If you are buying, inspect everything carefully, and hire a professional inspector who might spot things you might not be aware of. If you are selling, talk about your property’s benefits, but do not actively hide problems. And for both buyer and seller, find and get to know a good attorney, and never sign any document concerning your home or other assets without consulting your lawyer first.
As a buyer, you can and should inspect the property you want very thoroughly and carefully before you sign a contract. The best time to find problems is before you commit to a contract. As a buyer, it is your responsibility to find any problems that matter to you, such as plumbing or electrical issues. Better to go to contract with your eyes open than to get into a legal fight with the seller after the fact.
While the burden is on the buyer to find problems that a thorough inspection would reveal, there is no corresponding obligation for the seller to point out defects in the property being sold. If a buyer does not notice a visible crack in the foundation until after the closing, for example, the buyer cannot sue the seller for having sold a defective house. Sellers have no duty to say anything, good or bad, about their property.
But if a seller actively conceals a defect, that could be considered fraud, and a buyer could make a claim against the seller later on.
That is what happened in the case of Striplin v. AC &E Home Inspection Corp., decided in July 2023. The plaintiff buyers bought a house in Suffolk County, and after the closing, they discovered extensive damage due to leaking water. The Supreme Court judge dismissed their case, invoking the “buyer beware” doctrine.
On appeal, however, the lower court’s decision was reversed, and the case was allowed to proceed. The Appellate Division held that the “buyer beware” doctrine generally applies, but it does not protect a seller who takes affirmative steps to conceal a defect. In this case, the seller covered up the water damage by covering damaged and rotted wood with new wood, such that the serious damage was hidden and impossible to detect.
This action by the seller, said this court, constituted fraud by the seller, and the buyers had a valid claim for that. The buyers still had to prove their case, and they were entitled to a chance to do so. It was wrong to dismiss the case outright.
There are lessons for both sides in this case. If you are buying, inspect everything carefully, and hire a professional inspector who might spot things you might not be aware of. If you are selling, talk about your property’s benefits, but do not actively hide problems. And for both buyer and seller, find and get to know a good attorney, and never sign any document concerning your home or other assets without consulting your lawyer first.
