Who Is Responsible for Home Repairs After Closing?
Who is responsible for home repairs after closing? When you purchase a home, a home inspector likely inspected the house to make sure everything was okay. A new homebuyer would not expect to know all the ins and outs of the home. You should have a reasonable expectation that the house is in good condition. Unfortunately, when a new homeowner faces a major repair shortly after moving in, it is vital to determine who is responsible for paying for the repairs.
The first step is to review your purchase contract as well as your Real Estate Transfer Disclosure Statement (TDS) if required by the state. Your purchase contract should lay out the obligations of the seller and buyer. Your TDS should disclose any known defects of the property being purchased. It is the buyer’s responsibility to perform thorough inspections of the property before closing. The burden of proof falls on the buyer to show misrepresentation, fraud, failure to disclose, or breach of contract.
Undisclosed Known Defects
If the seller knows but does not disclose a defect with the home before the sale, the seller would be responsible for the costs of the repair, even after the loan has closed. The challenge is proving that the seller knew there were problems and did not disclose them.
One possible solution is to speak with your new neighbors. They may know about any undisclosed defects with the home.
Third Party Inspector Liability
During the purchase process, a third-party inspector should have viewed the property before the closing. To prove that the home inspector was negligent and should be responsible for the repair costs, the new homeowner should get a second opinion. The new inspector should look at the faulty fixture or item that requires repair. The new inspector will then determine whether or not the first inspector should have seen the problem.
If the new homeowner can prove that the first inspector was not diligent in his examination of the home before the sale, the inspector would then be liable. After all, the purpose of hiring a third-party inspector is to identify any potential problems with the property acting in the interest of the potential buyer. For example, if the buyer knew about the existing problems, he or she may not have agreed to the purchasing price. They may not have agreed to the sale altogether.
If the home inspector colluded with the seller or real estate agent to keep the sale from falling through, they might be guilty of fraud and misrepresentation.
Alternatives to Out of Pocket Home Repairs
With a new home, you may consider a homeowners insurance policy or a home warranty plan. An insurance policy typically covers accidental damage such as storms and fires. A warranty policy should cover repair costs of appliances due to normal wear and tear.