Caveat emptor, Latin for “let the buyer beware,” indicates that a person purchases something at their own risk and is responsible for determining the items’ viability and quality prior to making a purchase. For instance, a buyer who purchases a house and subsequently finds out it has a broken window is stuck with it, and the seller is typically not responsible.
In terms of real estate, when caveat emptor applies, buyers are required to exercise extra caution when purchasing property as any unpleasant shocks in the future could result from a seller’s failure to disclose problems with a property. Additionally, it is advised that buyers hire house inspectors to do a full sweep before final decisions are made. However, sellers are often contacted by the purchasers, after the fact, regarding a defect that only came to be found after closing. This is where the two types of defects, patent and latent, come into play.
Patent defects are blemishes that can be discovered by the buyer or inspector during a home inspection, such as obvious cracks in the wall. The onus is on the buyer to conduct due diligence, as the seller is under no obligation to disclose such flaws. When it comes to these kinds of defects, the rule of caveat emptor then pertains.
On the contrary, latent defects cannot easily be discovered by a buyer or their home inspector. Examples of such defects include moldy areas or electrical issues. If the seller discovers any latent defects in the property, they must disclose them to the buyer, and if they do not, the buyer can sue them in the future. The exception to this rule involves defects that are not known to the seller.
It is important to inspect a property thoroughly and raise any concerns about alleged defects well before closing. The principle of caveat emptor, one that has been around for more than two thousand years, is one that can make or break buyers and sellers in the real estate sector, and a rule that all should be aware of before entering into any Agreement.
If you believe you are entitled to damages due to latent defects or would like further information prior to buying a home – contact our team of experts today.