Duty to Disclose: Selling Dangerous Property

Each state will define dangerous properties differently. However, a property is considered dangerous if there has been an assault, a murder, a rape, or another violent crime on the premises.

How Do Landlords Know if a Property Is Dangerous?

Generally, caveat emptor means “let the buyer beware.” Another general rule is that failure to prevent crime is not illegal. Therefore, the buyer is responsible for ensuring that the landlord has changed the locks and negotiating for better lighting around the property. The buyer must take reasonable steps to determine the area’s safety and the apartment’s history, such as visiting the police station or asking the seller or landlord directly.

However, a seller may be required to disclose dangers or crimes in a few instances.

Misrepresentations
There can be no “misrepresentations,” which is just plain lying. Therefore, the seller cannot say that a sexual assault hasn’t occurred at the residence if it has or that the locks have been changed if they haven’t.

Warranties
In modern society and law, landlord-tenant relationships have been transformed. These include the implied warranty of habitability and the implied covenant of good faith and fair dealing. The landlord is increasingly responsible for disclosing:

• Past crimes
• Notifying tenants of criminal activity on the premises where the landlord is aware of it
• “Reasonably foreseeable” future attacks on tenants

When Will a Landlord Not Be Required to Disclose Crimes?

In general, landlords do not need to warn tenants about crimes in public areas adjacent to the apartment or in areas in which no effort has been made to control. Yet, a landlord may be responsible for disclosing the dangers of private parking lots, especially when previous measures to prevent criminal attacks have been taken. As a result, a seller must consider the nature, condition, and location of the premises when determining whether there is a duty to warn a buyer.

What Is the Homeowners’ Duty to Warn?

Homeowners are required to warn others about any known dangers or hazards on their property, including guests, licensees (such as home inspectors/other professionals who are given permission to perform specific functions on the property), and, in some cases, even trespassers. The non-owner occupant may also assume this responsibility depending on the state and the situation.

The precedent for such disclosure can be found in civil law and is called the “duty to warn.” As part of the duty to warn, the homeowner can be held liable for injuries caused to another if the homeowner fails to warn the other of a known hazard. Hazards like these may be hidden from visitors but known to the homeowner or occupant and may or may not be the result of negligence.

There is a duty to warn certain parties about known hazards, ranging from a dangerous condition (such as a gas leak) to all known hazards. To determine a plaintiff’s legal standing, the owner or occupant’s level of liability, and the limits on damages awarded to the injured party, the law distinguishes licensees, invitees, and trespassers.

The homeowner’s obligations are determined by their state’s precedents and statutes, just as they are in any civil or criminal case. Many states don’t require property owners or occupants to warn trespassers of any potential dangers on the property, while others, such as California, impose a “reasonable duty of care” toward anyone entering a property. It may be necessary, for instance, for a rural property owner who sets animal traps for pesky prairie dogs to post signs warning trespassers of the danger.

Regardless of whether or not a property transaction is taking place, homeowners need to know that they have a legal obligation to maintain a safe property for all invitees, including having performed an inspection to detect any hidden hazards.

Disclosure by the Seller

There is a difference between the duty to warn and a seller’s disclosure, but the potential hazards they cover are quite similar. As a duty to warn is designed to prevent physical injury (and subsequent legal action and damages), a seller’s disclosure is intended to increase the price and resale value of the home.

Disclosures should include the following six categories since they can significantly affect a home’s price:

• Infestation with termites/wood-destroying organisms;
• Moisture-induced mold damage;
• Paint containing lead;
• Natural hazards;
• Repairs of all kinds; and
• A notorious or infamous past.

Once again, these disclosures cover items that the homeowner or seller is aware of or should be aware of, and their breadth may vary by state.

An infestation of termites may not be noticed until the home’s structure has been damaged, and the presence of such pests may not be detected until the damage is already done. Most states, however, require this disclosure if a home has been treated for termites or other wood-destroying organisms.

Moisture intrusion is usually easy to detect, such as a leaking roof, a musty-smelling basement, or bubbling paint on damp drywall. Many home sellers try to hide serious water-intrusion problems in their homes, which is the number one reason new homeowners sue their former owners.

In the U.S., homes built before 1978 may have lead paint on the exterior, interior, or both surfaces. Lead that is undisturbed doesn’t pose a serious health risk, but in homes with children who may explore and ingest older and chipped paint, lead is a serious health hazard that can cause severe long-term neurological damage.

It is the seller’s responsibility to disclose any lead-based paint found in the home and allow the prospective buyer a 10-day window to test the house for lead. A failure to disclose lead can result in an automatic award of treble damages if it results in a lawsuit.

Natural hazards include floodplains, earthquake faults, and similar natural hazards. This disclosure aims to alert prospective buyers to the need to obtain additional homeowners insurance coverage or specific riders.

General repairs can include maintenance and repairs to a home’s major systems and components and structural repairs resulting from weather-related damage or moisture intrusion. Even though some of these categories may lead to litigation, the general rule is that if you’d want to know about it as a buyer, you should disclose it as a seller.

A lawsuit may be the only way to recover from a poor investment in a home if some undisclosed past activity or history has significantly lowered a house’s resale value (or has adversely affected its ability to be resold).

Homes with a history of hauntings, homes where murders have been committed, and homes that are used to manufacture methamphetamine are included in this category. Since the ingredients used to manufacture meth can permeate structures and remain permanently, they pose more of a health risk than a notoriety issue. As a result, future occupants of these homes could suffer severe neurological, respiratory, and other health risks.

What Should I Do if I Need a Lawyer?

Suppose you have recently purchased a property or started renting and believe the seller or landlord neglected to warn you of a dangerous condition. In that case, you should contact a real estate lawyer immediately. A local attorney will have thorough knowledge and understanding of your area’s laws and can better inform you of your rights and potential remedies.