2007-07-27 / Columnists

Spotlight On Elderlaw

When buying a house, Caveat Emptor: Let the Buyer Beware!
Commentary By Nancy J. Brady, RN, Esq. And Linda Faith Marshak, Esq.

It is very important to have the house you plan to purchase inspected, and do it BEFORE you sign any contract. To begin with, the purchase of a home will be the largest asset most of us will buy in our lifetimes. Additionally, you may be borrowing a large sum of money from a lender, with interest paid on the loan. This loan, also known as a mortgage, will be due and owing, regardless of whether the home you purchase has unnoticed problems once you take possession.

Where the purchase of a home is concerned, keep in mind the expression "caveat emptor" or "let the buyer beware." It is settled law in the State of New York that the seller of real property is under no duty to speak when the parties deal at arm's length. The mere silence of a seller, without some conduct or act which deceived the purchaser, does not amount to a concealment that is actionable as a fraud. Finally, the law is clear that the buyer has the duty to satisfy himself as to the quality of his bargain.

In order to assist buyers in a remedy to a lack of duty to disclose problems by the sellers, Real Property Article 14 section 462 (effective March 1, 2002) states that "every seller of residential property ...shall complete and sign a property condition disclosure statement... delivered to buyer prior to buyer signing a binding contract of sale." That sounds like a solution to the lack of disclosure due the buyer. Unfortunately, the remedy within the statute, known as "opting-out," provides that if a seller fails to deliver such a disclosure statement, that seller must credit the buyer with $500 against the agreed-upon sales price. As attorneys, we have never sat at a closing representing either buyer or seller where the opt-out payment has not been made. So, "caveat emptor." Yes, you should have a licensed engineer or inspector check the property thoroughly. The written report provided to you, prior to signing of the sales contract, will shed light on any major and minor issues with the house and can be used to:

  • Help the buyer decide if in fact he
  • still wants to make this purchase;

  • Recommend repairs and describe
  • estimated costs for those repairs;

  • Offer the repair costs that you may
  • use to further negotiate the sales

    price;

  • Act as an ongoing checklist for repairs
  • and maintenance you may

    want to continue with once you own

    the property and;

  • Offer the buyer legal recourse if an
  • inspection failed to identify an issue with the property that could have been identified by another inspector, according to the standards of the

    industry.

    Just a few other thoughts to ponder when purchasing a home:

    Get your attorney involved as early as possible in the process. This makes for much smoother sailing down the road when the parties have agreed to things that their attorney may have advised against. Be an "educated consumer." Know the value of other similar properties recently sold in that area to be sure you are not overpaying for the property, and be familiar with zoning laws and property use rules.

    We can be reached at (718) 945-7777.

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