Virginia Law: What are the Seller’s legal duties to disclose a defect with real estate?
I am often asked whether a seller has a duty to disclose defects with real estate. In many of these instances, the buyer has purchased real estate and later found that there are defects with the property. The buyer is seeking legal counsel because they feel the seller should have told them about that defect. Unfortunately, there is no bright line rule governing this type of disclosure. Many of these disputes are fact-specific.
The common law and doctrine of caveat emptor
Historically, Virginia has followed the legal rule of caveat emptor, which is derived from the English common law system. For those of you who did not study Latin, like myself, what this means is “let the buyer beware.” Plainly speaking, it means that the buyer has a duty to thoroughly inspect a property before purchase. It also means that the court will find that the buyer had knowledge of any defects that a reasonable inspection would have uncovered.
Virginia Residential Property Disclosure Act
The Legislature in Virginia recognized that not all purchasers of real estate understood their duties under the doctrine of caveat emptor. In response, they enacted the Virginia Residential Property Disclosure Act, which modifies the common law rule. The Act requires the seller of real estate to provide notice to the buyer that no representations are being made as to the conditions or qualities of the property. Consider the notice as a type of warning label for buyers of real estate. The notice must also alert the buyer of their option to secure an inspection and to act with due diligence.
How does the Act change the common law rule?
Even though the buyer has received notice under the Virginia Residential Property Disclosure Act, the seller of real estate is still not completely without liability. This seller must not say or do anything that may divert the buyer from the problem. The seller must not attempt to conceal or cover the defect. The buyer must be permitted to conduct a thorough investigation of the premises, preferably with a licensed inspector.
What are the seller’s responsibilities regarding defects today?
The simple answer to this question is that the seller should tell the truth and permit the buyer to conduct an unhindered inspection of the property. However, this does not require the seller to volunteer more information than is asked for by the seller. If this buyer does ask a question about a particular defect, the seller must give an honest assessment of the problem.
For the seller, the best practice would be to not make any representations or warranties regarding the property and demand that the buyer rely on their own home inspection. As a seller, you do not want to make any statements which may be later used against you and claimed as fraud.
Ryan C. Young | Real Estate Attorney | Richmond, VA