Did you recently buy a house? Even after due diligence and other careful assessment procedures, you may have unknowingly purchased real estate with a serious issue. For example, you might have bought a home from someone who said the roof didn’t leak because it was brand new. But the first rain of the season reveals a leak, and you discover that the roof was improperly installed.
Other common issues may include:
- Rusted or damaged sewer lines/pipes
- Water damage/mold
- Pest infestation
- Foundational or structural damage
- Issues with the septic system or HVAC
- Faulty wiring or electrical systems
Undisclosed material defects are, unfortunately, quite common in the real estate market. According to the International Association of Certified Home Inspectors, a material defect:
- Is an issue with a system or component of the home;
- Lowers the property value; and/or
- Endangers the health or safety of occupants.
All states treat undisclosed material defects slightly differently. In New Mexico, real estate sales are regulated by the Real Estate Disclosure Act. Under this legislation, the seller must inform the buyer of any major issues that they have actual knowledge of before the transaction.
The seller will need to communicate any defects they know about in a disclosure statement that they give to you before you sign the purchase agreement. This disclosure statement is not a contract, however, meaning it does not legally guarantee that nothing is wrong with the property. It is simply a list of all the issues the property has that the seller knows about.
However, the disclosure statement does contain language that protects you from fraud. In other words, if a seller says a certain part of the home is in working order even though they know it is not, this constitutes fraud, and the law does not shield them from liability. This type of fraud is called intentional misrepresentation.
What Are Your Options?
If the disclosure statement or purchase contract stated that something in the house is fully functional when it actually isn’t, your first option may be a demand letter. Sellers and brokers can be highly motivated to avoid litigation, which means you may be able to obtain compensation without going to court. If a demand letter will not suffice, you may need to file suit.
This is where hiring an experienced attorney is critical. A legal professional can help you draft a demand letter in a way that gives you the highest possible likelihood of success. If the demand letter fails, they can represent you in court, presenting your case in positive lighting and working the law to your advantage.
At The Threet Law Firm, we have an in-depth understanding of New Mexico’s real estate laws. Let us guide you through this process and help you obtain maximum compensation through negotiation or litigation. Call (505) 881-5155 or contact us online today.