Summary of this article
Sellers must disclose title disputes and encumbrances to the buyer before selling the property.
It crucial for them disclose the construction faults before sale.
Buyers should verify papers and inspect structure and ensure no material fact remains undisclosed.
If you are planning to buy a home, it is the obligation of the seller to disclose material facts that may impact your buying decision. Information related to the quality of property construction, encumbrances on property, legal disputes linked to the property, and occupancy-related hazards are some of the crucial material facts that sellers must disclose to the buyer before the buyer finalises the deal.
Material facts may influence the homebuyer’s decision to accept or reject the property purchase offer and the price they may be willing to pay for it. A material fact can be a piece of information that buyers may not be able to discover on their own, but such information may be crucial for the rightful decision making.
The reality is that in property dealing, the seller may sometimes conceal material facts to make the deal attractive and lure the buyer.
So, here are three important material facts for which homebuyers must take an undertaking from the seller before buying a property from them.
Legal Issues Linked To The Title Of The Property
When buying a home, it is the duty of the seller to provide the right information related to the title of the property to the buyer. If there is any issue related to the title of the property, such as a dispute in ownership, a discrepancy in the chain of deeds, or an ongoing title suit on the property, the buyer may invoke a non-disclosure of a material fact, and this can lead to legal action against the property seller as well as repudiation of the deal.
Encumbrances Hidden To The Buyer
At the time of selling the property, it is the duty of the seller to clear all the charges attached to the property, such as property taxes, water bill, electricity bill, and so on. If such encumbrances are not disclosed by the seller, the buyer can take legal action against the seller.
Construction Faults Or Structural Problem
The seller must disclose all material facts related to the construction of the property before selling it to the buyer. Issues like seepage, layout defects, cracks in the foundation, or structural faults that can impact the life of the property should be disclosed clearly before the buyer finalises the deal.
Non-disclosure of material facts by the seller can be resolved through legal action. However, to avoid getting into a wrong deal, the buyer must exercise proper due diligence before buying the property. A buyer should not rely completely on the seller’s disclosure and must engage a legal expert to check the property papers and hire an engineer to check the quality of material used in the property, and to inspect the structural strength. The buyer must remember the principle of ‘caveat emptor’, meaning let the buyer beware, when buying the property. So, despite disclosure by the seller, it is the duty of the buyer to conduct proper due diligence before buying the property to avoid a dispute at a later stage.
The author is an independent financial journalist.
This article is intended solely for educational and informational purposes. It should not be construed as investment, financial, legal, or tax advice. Readers are advised to consult an appropriate professional before acting on the information provided.
(Disclaimer: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)
