Listing a land contract
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Listing a land contract
I have a land contract on a building
that I have found to have serious
structural problems rotten and
failing structure that was cobbled
and covered by the original owner.
The deficiencies would not have been
found under a normal inspection. I
am considering listing the property
so that I can secure the balloon
payment for the original seller and
clear myself of the contract. If I
do so, can I be held liable for the
structural problems? Otherwise, I
may have to cancel the deal.
Asked on May 16, 2018 under Real Estate Law, Michigan
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
Yes, you would be liable for the structural problems if you don't disclose them to the buyer before they enter into the contract. Real estate sellers have a legal obligation to disclose problems of which they are aware--as you are aware of the structural issues--but which would not be readily apparent to a buyer--such as problems which "would not have been found under a normal inspection." If you fail to disclose this relatively hidden ("latent") problem to a buyer, you will have committed fraud; the buyer can use that fraud as a basis to void or rescind the contract (return the building to you and get their money back) and/or seek monetary compensation (like the cost to repair the structure).
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