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Can you sue a real estate agent who failed to disclose a defect in your home?

On Behalf of | Jan 11, 2023 | Real Estate Litigation |

The answer to the question above is yes. In fact, this is one of the most common reasons real estate agents face lawsuits nationwide.

The same holds true in Georgia, but there are some quirks in state law that make the situation a little different here.

Disclosure statements

Many states require home sellers to fill out a formal disclosure statement listing any defects they know about in the property. These vary from state to state, with some states requiring more thorough inspections than others. Some states require specific language in their forms.

Georgia does not require sellers to fill out a formal statement. However, they have a duty to inform a buyer of any material defects they know about in the home.

According to the International Association of Certified Home Inspectors, a material defect is any specific issue that poses an unreasonable risk to people or will significantly lower the value of the property.

This requirement applies to any such material defects that are not readily apparent.

For instance, if the seller knows that the floorboards under the back room are rotting away, but the buyer cannot see this when inspecting the property, then the seller must disclose this information.

Real estate agents

Because real estate agents act on behalf of sellers, this requirement applies to them as well as the sellers. An agent can be held liable if they do not disclose known material defects in a home they have sold.

Real estate agencies and industry groups tell agents to reduce their liability by thoroughly interviewing sellers and encouraging them to disclose all known issues. They even instruct agents to disclose defects when they know that a seller has not told a buyer everything.

Of course, there are situations in which agents fail to disclose information that buyers should know about. When this happens, buyers may be able to hold the agents and sellers liable for misrepresentation. They may be able to get some of their money back, or even rescind the sale.