Can I Hold the Seller of a Home Liable in Mississippi for Failure to Disclose Flooding Problems?
The relationship between a buyer and seller of real estate is created by contract, and the terms of the contract generally determine the rights of the buyer and seller. You should carefully review the terms of your real estate contract to determine your rights and obligations regarding defects in the property. Mississippi disclosure information requires the seller to tell the buyer of previous water damage problems with the property. The answer to your question will depend on proving the seller had knowledge of the moisture problem. This will be a matter of subjective determination for the court, based on all the facts and circumstances involved. If the seller failed to disclose any known material defects in the house, you may have recourse against him or her. To receive compensation for losses, a complaint may be filed in court. Please see the links to the forms below.
Defects listed on a disclosure form may also include appliances, electrical system, water and sewer system, roofing, structural and foundation problems, moisture, and others. Latent defects are problems with the property that the buyer or buyer’s agent is not able to discover through a normal inspection. It is a hidden or dormant defect in a premise that cannot be discovered by observation or a reasonably careful inspection. Some states interpret latent defects to mean structural items (including foundational problems) and safety items. The disclosure laws typically require material or important defects to be disclosed. If the seller provided a warranty, there may be recourse through a breach of warranty claim. Also important is whether you elected to have a home inspection performed and whether that inspection revealed any problems.
Whether you can hold a home inspector responsible for missed defects depends upon whether the problems were visually discernible and within the scope of the inspection. The answer depends partly on the terms of the contract for the inspection and what was covered by such inspection. If not addressed in the contract, the court will judge whether such a defect should have been discovered based on the circumstances involved and inspection industry standards. Home inspectors routinely disclaim liability for property defects that are located below ground, under slab floors, beneath insulation, within walls, behind personal property, inside fixtures and appliances, or for any reason whatever, not fully exposed and readily accessible at the time of the inspection.
Whether the seller is liable will depend on all the facts involved, such as any warranties and disclosure statements that may have been provided by the seller. Fraud is generally defined in the law as an intentional misrepresentation of material existing fact made by one person to another with knowledge of its falsity and for the purpose of inducing the other person to act, and upon which the other person relies with resulting injury or damage. Fraud may also be made by an omission or purposeful failure to state material facts, which nondisclosure makes other statements misleading.
To constitute fraud, a misrepresentation or omission must also relate to an 'existing fact', not a promise to do something in the future, unless the person who made the promise did so without any present intent to perform it or with a positive intent not to perform it. Promises to do something in the future or a mere expression of opinion cannot be the basis of a claim of fraud unless the person stating the opinion has exclusive or superior knowledge of existing facts which are inconsistent with such opinion. The false statement or omission must be material, meaning that it was significant to the decision to be made.
Sometimes, it must be shown that the plaintiff's reliance was justifiable, and that upon reasonable inquiry would not have discovered the truth of the matter. For injury or damage to be the result of fraud, it must be shown that, except for the fraud, the injury or damage would not have occurred.
To constitute fraud the misrepresentation or omission must be made knowingly and intentionally, not as a result of mistake or accident, or in negligent disregard of its truth or falsity. Also, the plaintiff must prove that the defendant intended for the plaintiff to rely upon the misrepresentation and/or omission; that the plaintiff did in fact rely upon the misrepresentation and/or omission; and that the plaintiff suffered injury or damage as a result of the fraud.
Generally, a realtor isn't liable for house defects unless a warranty was provided or they knew of the defect. Cases from a few states hold that the broker is not liable for incorrect information provided by the seller if the broker has no basis to know or suspect the information is inaccurate. The prudent broker should ask the seller to provide written information and documentation if it exists. Information provided to the buyer may include the written qualification that the broker is not warranting the accuracy of such information. Often the real estate disclosure statement will insulate the broker from liability. However, not all property conditions or representations are covered by the standard disclosure statement.
Please see the following MS statutes:
§ 89-1-505. Limit on duties and liabilities with respect to information
required or delivered.
(1) Neither the transferor nor any listing or selling agent shall be
liable for any error, inaccuracy or omission of any information delivered
pursuant to Sections 89-1-501 through 89-1-523 if the error, inaccuracy or
omission was not within the personal knowledge of the transferor or that
listing or selling agent, was based on information timely provided by
public agencies or by other persons providing information as specified in
subsection (2) that is required to be disclosed pursuant to
Sections 89-1-501 through 89-1-523, and ordinary care was exercised in obtaining
and transmitting it.
(2) The delivery of any information required to be disclosed by
Sections 89-1-501 through 89-1-523 to a prospective transferee by a
public agency or other person providing information required to be
disclosed pursuant to Sections 89-1-501 through 89-1-523 shall be deemed
to comply with the requirements of Sections 89-1-501 through 89-1-523 and
shall relieve the transferor or any listing or selling agent of any
further duty under Sections 89-1-501 through 89-1-523 with respect to
that item of information.
(3) The delivery of a report or opinion prepared by a licensed
engineer, land surveyor, geologist, structural pest control operator,
contractor or other expert, dealing with matters within the scope of the
professional's license or expertise, shall be sufficient compliance for
application of the exemption provided by subsection (1) if the information
is provided to the prospective transferee pursuant to a request
therefor, whether written or oral. In responding to such a request, an
expert may indicate, in writing, an understanding that the information
provided will be used in fulfilling the requirements of Section 89-1-509
and, if so, shall indicate the required disclosures, or parts thereof, to
which the information being furnished is applicable. Where such a
statement is furnished, the expert shall not be responsible for any items
of information, or parts thereof, other than those expressly set forth in
§ 89-1-509. Form of seller's disclosure statement.
The disclosures required by Sections 89-1-501
through 89-1-523 pertaining to the property proposed to be
transferred shall be set forth in, and shall be made on a
copy of a disclosure form, the structure and composition of
which shall be determined by the Mississippi Real Estate
§ 89-1-511. Disclosures to be made in good faith.
Each disclosure required by Sections 89-1-501 through 89-1-523 and each
act which may be performed in making the disclosure, shall be made in
good faith. For purposes of Sections 89-1-501 through 89-1-523, "good
faith" means honesty in fact in the conduct of the transaction.