Purchasing a home is one of the most important decisions you will make in life. Whether you are in the market for a primary residence, vacation home, or investment opportunity, in Alabama there is a very important factor to consider.
Alabama is a caveat emptor state. Caveat emptor is Latin for “let the buyer beware.” This requires the buyer to perform appropriate due diligence when entering a real estate transaction. It is the buyer’s responsibility, with the help of their real estate agent, to perform inspections that will assess the knowledge of the value, potential issues, warranties, and defects a seller claims.
Caveat emptor eliminates the duty of the seller from disclosing issues with the property’s physical condition during the sale. As a result, the responsibility of discovering defects falls upon the buyer.
There are a few instances where caveat emptor does not apply and the seller is required to disclose issues with a property. A couple of those are:
- the seller is aware of a material defect not readily seen by the buyer, that could pose a health or safety risk to the buyer, or
- the buyer directly asks the seller about specific defects.
Alabama’s health and safety guidelines require home sellers to notify potential buyers of defects that could pose a direct threat to the buyers’ health or safety. This would include disclosures about lead paint, mold, structural issues, or if a home contains asbestos.
Secondly, if a buyer directly asks about a defect, Alabama law requires the seller to answer honestly and to disclose known defects. If a buyer discovered a defect the seller failed to disclose, the buyer can sue the seller for misrepresentation, negligence, suppression of material facts, or even fraud. However, the buyer would have to show that the seller had prior knowledge of the defect, which could be difficult.
How do you protect yourself on either side of the transaction? Savvy sellers will disclose material defects as a risk-management tool. This will help avoid conflicts with the buyer or the possibility of a lawsuit.
Completing a property disclosure form and giving it to the buyer during the sale is a safeguard during the transaction. Astute buyers will perform necessary inspections above and beyond the home inspection. In addition, a buyer can research the neighborhood, talk with neighbors and run internet searches on the property.
How can Mike and Brandie Brown and the Josh Vernon Group help buyers and sellers during the transaction?
With a proven track record of selling hundreds of properties, they know the questions to ask, or that will be asked to uncover potential defects while remaining objective. They will help you observe the details, and on your behalf will be inquisitive and resourceful in order to protect one of your biggest investments.