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Home seller not required to provide a warranty


Q: We have just placed our house, which is nearly 30 years old, on the market. We are concerned whether we will be responsible for any defects in the property or whether we will be liable for any damages which the buyer might find after settlement. Are we required to give the purchaser any guarantee or warranty? Under what circumstances might we be liable for any damages in the property?

A: In Maryland, it is generally accepted that there are no implied warranties in the resale of a home. In other words, if the contract does not state that the seller specifically guarantees the condition of the property, then no warranty will be implied. The standard resale contract in Maryland says that no warranties for the condition of the property are made by the seller.

There are certain exceptions. The main one is in the case of fraud. For example, if the seller knows or has reason to know of a defect in the property, and tries to conceal the defect, then the seller may be responsible for any subsequent damages the purchaser may suffer related to the defect.

A classic example is the case of a seller who knows of a water leak in the basement and, before settlement, paints over the water marks to conceal the defect.

A homeowner is not required to list for the buyer every repair or defect in the house.

The standard real estate contract often contains some express warranties. For example, in the property condition paragraph, the seller warrants that the property will be, for the most part, in the same condition as it was on the date the contract was ratified. So, if the hot water heater breaks one week after ratification but before settlement, the seller must repair or replace the hot water heater.

Also, the seller generally certifies that the electrical, plumbing, heating, air conditioning and other mechanical systems will be in operating condition at the time of settlement. These items may not be in perfect condition, but they must be in general operating condition. This does not mean that the seller guarantees the condition after settlement.

Remember, honesty and fairness are the keys. Try to treat the prospective purchaser the same way you would like to be treated.

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