Additional Coverage:
- Selling Your House? 8 Legal Reasons Homebuyers Could Sue You (And Win) (financebuzz.com)
Selling Your Home? Don’t Get Caught in a Lawsuit Trap!
Selling your home can feel like a triumphant milestone, the culmination of a successful financial journey. You bought, you lived, and now you’re ready to sell, ideally with a tidy profit in your pocket.
But hold on a minute! This celebratory moment could hide a surprising pitfall: the risk of a lawsuit.
It might sound far-fetched, but there are several scenarios where a home seller could find themselves in legal hot water, even facing a lawsuit. Often, sellers are completely unaware they’re creating a legal opening, while buyers, keen to protect their investment, might seize an opportunity if something goes awry.
Want to ensure your hard-earned profit doesn’t vanish into attorney’s fees? While specific rules vary by state, here are eight common and often surprising ways you could be sued when selling your house.
1. The Undisclosed Past: Failing to Reveal Previous Home Issues
Many states require sellers to complete a “Seller’s Disclosure” form before a sale. This is where you’re obligated to list any known problems with the property, from a pesky leak to past fire or water damage, mold issues, needed roof repairs, or structural concerns. While you can’t be expected to know about every hidden flaw, intentionally omitting issues you are aware of could easily land you on the wrong side of a lawsuit.
2. “Fixed” Isn’t Forgotten: Neglecting to Disclose Remedied Problems
So, you had termites, and you took care of them? Excellent!
You did what any responsible homeowner would. But when it’s time to sell, there’s one more crucial step: disclose that past issue, even if you believe it’s completely resolved and no longer a concern.
Failure to properly disclose these remediated problems could lead to a lawsuit if the buyer later discovers the history.
3. The Cover-Up: Hiding a Defect or Problem
Discovered a major leak in your bedroom ceiling just before listing? Don’t reach for the paint can to slap on a fresh coat and hope for dry weather. Attempting to conceal a defect with a quick “band-aid” fix can lead to serious legal trouble, especially if the new owners uncover your attempt to hide the problem rather than disclose it.
4. What Stays, What Goes? Not Understanding “Fixtures”
Generally, all “fixtures” convey with the house unless explicitly stated otherwise in the contract. This typically includes appliances, though the distinction between built-in and freestanding items can be tricky.
It’s vital to spell out precisely what’s included. For instance, if you don’t specify that the dishwasher isn’t part of the sale, you could face big trouble when the buyer moves in to find it gone.
5. Breaking the Contract: Taking Promised Items
Things like draperies, floor coverings, lighting, and even wall-mounted shelving might be included in the purchase contract, even if they feel more like decor than part of the house. If these items have been promised to the buyer and you mistakenly (or intentionally) take them with you, the buyer could have a legitimate case for a lawsuit. Double-check that contract before you start unscrewing curtain rods!
6. Loose Lips Sink Sales: Opening Your Mouth Without Thinking
Anything you say to the buyer, whether it’s a casual comment about the house or the neighborhood, could potentially be used against you. If they can prove that what you said was incorrect or misleading, you could be sued. It’s always best to let your real estate agent handle all buyer interactions to avoid any unintentional financial missteps.
7. The Backtrack: Breach of Contract
When you sign a contract to sell your house, you’ve entered a legally binding agreement. If you break that contract and back out of the sale, the buyer may have the right to sue you. While there can be legitimate reasons for a seller to cancel a contract, those reasons don’t always protect you if the buyer decides to exercise their full legal rights.
8. Oops! Honest Mistakes Can Still Cost You
Unfortunately, simply not knowing something isn’t a shield against a lawsuit. Whether it’s accidentally leaving critical information out of your disclosures, attempting a DIY patch job on a significant defect, or deciding you really do want that dining room chandelier after all, what seems like an honest mistake could still put you on the wrong end of a legal battle.
The Bottom Line
From strategizing ways to manage your mortgage to leveraging your home equity for renovations, there are smart ways to navigate the home-selling process without landing in hot water.
Always ensure you have a trusted real estate agent by your side to guide you through the complexities and help you maximize your profit. And when it comes to legal advice, always consult with a qualified lawyer to ensure you’re protected every step of the way.
Read More About This Story:
- Selling Your House? 8 Legal Reasons Homebuyers Could Sue You (And Win) (financebuzz.com)