Buying a house is a major investment that comes with certain risks. For instance, defects can sometimes go unnoticed, even after completing a thorough inspection, leaving you to deal with potential safety hazards and unexpected repairs. This is why many states, including Oklahoma, have laws to protect homebuyers from unknowingly purchasing real estate with undisclosed problems.
The sale of residential properties containing up to four units is subject to the Oklahoma Residential Property Condition Disclosure Act. This law is an exception to the common law rule of “buyer beware” and has been in place since 1995. But what happens if the seller fails to disclose? Can the buyer sue? Find the answers to your questions here.
What Does the Residential Property Condition Disclosure Act Require?
Home sellers in Oklahoma are responsible for disclosing the home’s condition to potential buyers. However, disclosure is only required if the seller is represented by a real estate agent. If the seller self-represents, disclosure is only required if the buyer requests it. Any such request must be granted in writing and delivered to the seller as a property disclaimer statement or property condition disclosure statement.
A property disclaimer statement informs the buyer that the seller does not make any representations about the property’s condition and that the buyer should rely on their own inspections. This disclaimer is only applicable if the seller has never lived in the house and is unaware of its condition.
Offering a property condition disclosure statement is much more common. This is when the seller discloses any known defects and repairs that have been made to the property. The seller may currently live in the house, have lived there before, or have never lived there but know of potential defects.
What is Included in a Property Condition Disclosure Statement?
A disclosure statement addresses all problems with the house that are known to the seller. The statement should be delivered to the potential buyer as soon as possible, and certainly, before the seller accepts an offer.
The defects included in this statement can range from minor issues to major problems that may affect safety and property value. Some common defects disclosed in this statement include:
- Issues with the roof, foundation, or structure
- Plumbing or electrical problems
- Water damage or leaks
- Damage sustained from natural disasters
- Problems with the heating or air conditioning system
- Issues with windows or doors
- Presence of rodents or wood-damaging insects
- Environmental hazards such as lead, radon, or asbestos
- Property disputes or boundary issues
- Prior manufacturing of methamphetamines within the house
- Any other issues the seller is aware of
Sellers are also required to disclose any repairs or improvements that have been made to the property. This includes repairs made to correct any of the defects listed above.
Can You Sue a Home Seller for Not Disclosing?
Yes, a homebuyer can sue a seller for nondisclosure. Here are the three circumstances under which a buyer may sue:
- Failure of the seller to provide a statement or amend an existing statement with new information before accepting a purchase offer
- Failure of the seller to disclose defects known to them at the time of the sale
- Failure of the real estate agent to disclose defects they know about prior to accepting an offer on behalf of the purchaser
If a buyer is successful in their lawsuit, they may be entitled to various remedies, including rescinding the sale, receiving damages, or requiring the seller to make repairs. The statute of limitations for a buyer to file a lawsuit is two years from the date of discovery of the defect or five years from the date of sale, whichever is earlier.
Note that not all transactions are covered by the Residential Property Condition Disclosure Act. For instance, the act does not apply to sales of new homes, sales by court-appointed fiduciaries, transfers resulting from foreclosure, or transfers between co-owners or family members.
Should You Hire a Lawyer?
If you’re a homebuyer who believes the seller did not disclose known defects, it may be necessary to hire a lawyer. While it’s possible to represent yourself in small claims court, it becomes advantageous, even necessary, to seek legal counsel when damages reach $40,000 or higher.
An experienced real estate lawyer can help you navigate the legal process and determine if you have grounds for a lawsuit. They can also help you determine what damages you may be entitled to and negotiate a settlement with the seller or their insurance company.
In addition, if you’re a seller putting together a property condition disclosure statement, it may be in your best interest to consult a lawyer who can ensure you disclose all the necessary information to avoid legal pitfalls. By following the requirements of the Residential Property Condition Disclosure Act and seeking legal counsel when necessary, homebuyers and sellers can protect themselves during real estate transactions.
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