Suing a Real Estate Agent for Misrepresentation

Suing a Real Estate Agent for Misrepresentation

So, you’ve purchased your new home. You are excited to settle in. Your first weekend in the new home, you’re sitting in your favorite chair, drinking coffee and watching children play in the beautiful new living room. Then it happens: the air conditioner goes out.  You discover that the HVAC unit needs to be replaced. It’s going to cost thousands for a new unit. You had this inspected before you bought the house, and you did everything to make sure you weren’t buying something defective. Do the sellers have to make this right?  The good news is you may have options, including potentially suing a real estate agent for misrepresentation. The bad news is, the answer may not be as clear as you would like it.

What is a Seller’s Responsibility When Selling a Residential Property?

If you take a look at a standard South Carolina Real Estate Contract, you’ll see a section that deals with disclosures. Some people have a real estate attorney draft a special contract, but most people working with realtors will use this standard contract or one just like it. Under Section 19 of the standard real estate template contract, you will notice two options: (1) seller will sign a disclosure statement or (2) seller will not sign a disclosure statement. In most residential real estate contracts, you would want the seller to sign a disclosure. This is a statement of any KNOWN defects that could affect the property. Further, the misrepresentation or non-disclosed defect must be ‘material,’ meaning it is something that, if known to you, would have reasonably been grounds to terminate the contract. So, failure to disclose that a light switch is broken would not count. Failure to disclose faulty wiring, however, may count.

What Must Sellers Disclose?

Under Section 27-50-40 of the South Carolina Code, sellers who provide a disclosure must disclose certain things. Here are just a few examples, but the statute lists them in more detail:

  • Plumbing problems
  • Defects with chimneys and gas lines
  • Electrical system issues
  • Sewer problems
  • Infestations
  • Heating and Cooling defects
  • Many other things listed in the statute

What is a “Known” Defect?

The law only requires sellers to disclose those defects that are known to them at the time of the disclosure. If the sellers are the original owners of the home, it may be presumed that defects were known, but in many situations, this may not be true. For instance, in our example of the air conditioner, it may be that the sellers never had any problems, and you just have bad luck. The AC unit went out at a bad time. Then again, if the repair company tells you they’ve been to the same house 20 times in the past year and even recommended replacement weeks before the sale, then you may have a strong case that the seller had actual knowledge of the problem and either failed to disclose it or intentionally concealed the problem.

Constructive vs. Actual Knowledge

The law requires that the seller had either actual knowledge or ‘constructive knowledge’ of the defect. Otherwise, you will not be able to pursue suing a real estate agent for misrepresentation. Constructive knowledge is proven by facts and circumstances that would reasonably put them on notice of the problem. For instance, evidence that the repair company wrote repair tickets on 3 or 4 occasions in the last year may be sufficient to prove that the seller knew or should have known of the problem.

Latent vs. Open and Obvious Conditions

One big problem, however, is that you have a duty to inspect. If you had a home inspection, the law presumes you had a chance to discover the problem and make it a condition of the sale. If you inspected the property and decided to move forward, then you must show that the problem was such that even a reasonable inspection would not uncover it. This means either it was something latent (hidden or unobservable) or the seller actively hid it. An example may be placing furniture over a stained section of flooring that would have shown evidence of a leak.

Get Help Before You Have More Problems

A money pit house can be a disaster. If you believe you purchased a home from a dishonest seller who either hid or misrepresented defects, contact the Klok Law Firm LLC to discuss your home defects. You may be able to determine whether you have a right to pursue suing a real estate agent for misrepresentation. In some cases, the problem may be so substantial it calls for invalidating a contract. The family home is the biggest purchase most Americans will make. Do not take chances. Get help today.