What Is A Material Latent Defect?

Eric Stewart July 10, 2015


When selling your home, there is a myriad of paperwork to fill out before the home even goes on the market. In addition to a listing agreement with your real estate agent, most states mandate that sellers complete various disclosure forms (required forms vary by state), which provide potential buyers information about the home, such as homeowner association fees, cost of monthly utilities, any property easements, and condition of the home.

Disclosing Material Latent Defects

In most states, sellers are obligated to disclose any known defects about their home, including material latent defects. These are defects about your home that may not be readily observable, but would materially affect the value of the home or a buyer’s decision to purchase it.

Examples of material latent defects include:

  • Foundation instabilities or cracks
  • Leaks in the ceiling or roof
  • Plumbing issues (i.e. water leakage in basement)
  • Toxic conditions, such as the presence of lead, mold, radon or asbestos
  • Faulty electrical wiring

The general law of the sale of property is caveat emptor, or let the buyer beware. This means that buyers must do their due diligence to inspect the home before taking possession, which is typically done by a licensed home inspector. However, there are limitations to what an inspector can uncover during a home inspection, and buyers will have to accept the sellers’ word for any underlying problems.

The seller must not only disclose any known material latent defects, but the seller cannot conceal any defects to potential buyers. Real estate agents representing sellers are held to the same standard and must disclose any known material defects to potential buyers and buyer agents.

While sellers may think revealing material latent defects is a burden, disclosure laws protect both buyers and sellers. If all known defects are noted on a disclosure form by the seller and acknowledged by the buyer (through their signature), the seller cannot be held liable for those specific defects after closing. However, a seller who doesn’t disclose known defects can be sued by the buyer after the defect is discovered. The buyer may not only request money to repair the material defect, but also for lawyer fees.

You don’t want to make your home sale any more challenging than necessary. Your accurate and honest disclosure will help facilitate the sale.

For any questions on disclosure requirements or navigating the complexities of the home selling process, contact the Eric Stewart Group, trusted real estate professionals with over 27 years of experience helping sellers get top dollar for their home. For other useful tips and advice on selling your home, download our free Market Ready Guide! And, for a list of recommended vendors to assist with any home repairs, download our complimentary Preferred Vendor Guide.




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