CAVEAT EMPTOR AND Alabama Real Estate
Caveat Emptor. (kah-vee-ott emptor) Latin for “let the buyer beware.” A doctrine that places on buyers the burden to reasonably examine property before purchase and take responsibility for its condition.
Should you be concerned? If you are buying real property in Alabama, you’d better be. Why?
Because Caveat Emptor is the law in Alabama.
If you are buying in Florida, Georgia, Tennessee, or Mississippi, any of the states surrounding Alabama, not so much, because in the states that are not caveat emptor states, their judicial system places responsibility on the seller to disclose defects and pass on knowledge they have about the home they are selling. This disclosure is typically performed on a two-three page document which the seller answers questions about everything dealing with the property.
But not in Alabama. Caveat emptor / “Buyer Beware” is the law in Alabama.
This means that the Seller in Alabama has no affirmative duty to disclose a material defect in the home, unless the defect was known and could adversely affect the health or safety of the buyer. Affirmative duty means voluntary disclosure without being asked. A material defect is best defined as one which would be a significant factor in a buyer’s decision to buy or not buy a particular house. And, oh yeah, the health or safety disclosure requirements are more narrowly defined by federal law than the average consumer would think. And to make things worse, Alabama case law has held for the Seller citing caveat emptor in instances when the Seller lied to the Buyer in response to direct questions.
Caveat emptor definitely stacks the cards against the buyer. The burden is on the Buyer to examine the property and take responsibility for its condition.
Caveat Emptor is Serious but has a simple remedy.
The buyer simply must have the property thoroughly inspected. The buyer must take nothing for granted. All areas of concern must be inspected. If the normal home inspection reveals concerns that are beyond the scope of the inspection such as plumbing, electrical, HVAC, structural or mold, It is the responsibility of the Buyer to retain professionals to investigate.
When inspections are done and the buyer closes on the sale, and, then a defect rear its head, the buyer has a legal recourse. The buyer won’t sue the seller, unless the seller intentionally concealed pertinent information about the property that could affect one’s health and safety; the buyer would sue the inspector. Such suits where inspections have been done, Alabama Supreme Court has generally ruled in favor of the buyer. The difficulty is that the inspector’s contract frequently limits the level of liability (e.g. $2,500 in the most recent contract I looked at).
[This post originally appeared in TomBallSells.com on 9/2/2017]
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