Today we’re going to talk a little bit about real estate. I bring this up because it comes up so much when I’m talking to potential clients, I get a lot of calls on this subject because most of the time the seller failed to disclose something to them before they purchase the house. When the seller fails to disclose something, what do you do?
In Nevada there’s something called a seller’s real property disclosure (SRPD) form, and it has to be disclosed by law at least 10 days before the purchase is complete. So, before the house transfers to the new owner, the SRPD has to be completed and provided to the buyer. The real estate agent will not sign it or fill it out for you because that is a liability to them since they have no idea the condition of the house.
All you do is check boxes, yes or no, if you know of any problems with certain items including the plumbing, the electrical, the structural. There’s lots of different categories and so if you know that there’s been an issue in the past, even if it’s been repaired, you are required to disclose it. If you do not disclose it, then we may have issues which is exactly why people call me.
For example, I recently got a call where the buyer said “I just bought a house and they didn’t disclose that there was a leak in the roof and my home inspector did not find it when we did the home inspection. What do I do?”
That’s kind of a big open question, so the first thing I ask is what does the SRPD say? Did the seller say anything about the roof? What box did they check? What did they say? Most of the time my buyer says, no, they didn’t disclose it, they said there were no issues with the roof. The next question I always ask is how much did it cost to repair? And I asked this question because a lot of people, this is a theme with litigation in general. You’ve always got away the economics. Does it make sense to file suit? Because filing suit is very expensive. Of course you’ve got to hire an attorney, you’ve got to pay the attorney, you’ve got to pay the court costs. It’s going to take a long time. It’s going to be emotionally draining. So you’ve got to think about whether it’s really worth it.
So the damage question is always the key. How much did you have to spend to repair this? Because that’s going to factor into whether you want to spend money to pursue it. If it’s a small minor repair, of course, common sense tells you that you don’t do anything. You just walk away and forget about it.
Let’s say my potential client says the damages are $5,000. That’s how much it costs to repair the roof. At that point, if we know that the seller didn’t disclose it and we know the damages are 5,000, the next question is do you think the seller knew there was a leak? What evidence do you have that the seller knew that this was happening before he sold, and he intentionally checked the ‘no’ box on the SRPD?
That’s also a key item legally. Like do they know what they did? Did they do an intentionally? In our roof example, the potential client said that when a roofer went up there, they could see evidence that this had previously leaked and there was staining, and so it appeared that the seller would have known.
There’s another step involved before you get to court. If the SRPD was from the Greater Las Vegas Association of Realtors (GLVAR), the form says that the parties agreed to mediate. So, you’ve got to go to GLVAR mediation first before you get to court. A lot of times this is a good idea because it’s very inexpensive and maybe you can resolve it without having to actually file suit.
Another thing to remember is that travel damages can be awarded. What does that mean? Well, if the seller fails to disclose something that they know they knew on SRPD and you incurred damage, then you may be able to recover travel damages, which is basically triple damages for the actual amount it costs you to repair. That’s, that’s the key. So in our roofing example, he theoretically could potentially be able to recover three times the amount of damage.
It would only be on the amount of actual damage. And when I say actual damage, I mean the actual cost of repair. So we’re not talking about the roof was leaking and you had to go sleep somewhere else for the night. I mean, we might be able to get that in, but that’s not as clean and clear as just the actual cost that it was to repair the roof.
If you buy a home and you discover a defect that you didn’t know about before and that wasn’t disclosed and you think the seller knew about, then you may have a case and you can always call our office and talk to us about it.