Understanding Caveat Emptor

 Alabama is Different than most other States…. I can’t say for sure but based on my research, the only states that are still caveat emptor states are Virginia, Arkansas, and Alabama. When a person buys real estate in these three states, they need to fully understand it is their responsibility to make sure they know what they’re getting, that it’s in good condition and works properly. When the buyer does his due diligence to have the property inspected, their legal rights remain in place after closing should some latent structural defect appear. If a buyer elects not to have the proper inspection done, closes on the transaction and then a latent structural defect appears and the buyer sues for damages; numerous Supreme Court cases have ruled in favor of the seller and stated caveat emptor; the buyer is responsibility to inspect the property prior to purchase.

BUYER BEWARE

This is a topic I try to talk about in every class I teach because it is the most important and the least understood law. I intentionally try to scare real estate agents to get them to understand the importance of the law and the effects it has on people buying real estate in Alabama. Today I will tell you how to see the law as it is written, disclose the other states that have the same law, and explain the dangers and remedies associated with caveat emptor.

Caveat Emptor is the law in Alabama…..

The Alabama Supreme Court has held caveat emptor to be the law in a consistent line of cases. Everyone should be on notice that there is no warranty which comes with the sale of a used home.

Real estate agents were taught when completing their educational requirements to get their license that caveat emptor is a Latin [Read more…]

What You Need to Know About Molds

Which Molds are Good Molds?

As discussed in my last post, mold is one of the nationally accepted and notable concerns affecting human health and safety issues as related to buying or selling real estate. Not all molds are bad so I told you I would discuss it in more detail. I have researched a lot of material and time will not permit me to disclose every source. The following information is published by the EPA and will help up draw a better conclusion about molds.

Introduction to Molds

Molds produce tiny spores to reproduce. Mold spores waft through the indoor and outdoor air continually. When mold spores land on a damp spot indoors, they may begin growing and digesting whatever they are growing on in order to survive. There are molds that can grow on wood, paper, carpet, and foods. When excessive moisture or water accumulates indoors, mold growth will often occur, particularly if the moisture problem remains undiscovered or un-addressed. There is no practical way to eliminate all mold and mold spores in the indoor environment; the way to control indoor mold growth is to control moisture.

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Proven Health & Safety Issues

Pay Attention to Warnings

When buying real estate, health and safety issues are a major concern. Under Agency law that exists in Alabama, many agents prefer working with buyers of real estate as a Transaction Broker rather than a Single Agent in an attempt to lessen their liability. Without realizing it, they are actually increasing their liability but that’s a discussion for another day. In Alabama, the seller is not forced by law to disclose information to a potential buyer unless Health and Safety issues exist and then federal law trumps in and mandates all Health and Safety issues must be disclosed to any potential buyer. You can easily see how agents might quickly justify disclosing a particular issue claiming it to deal with one’s health or safety. Some of those claims will not hold up in a court of law and that could bring on additional problems for the agent and for the consumer.

Today I want to discuss some of the health and safety issues that have been confirmed and are accepted nationally as health and safety issues. Due to the difficulty of the rule-making process (which is governed by the Administrative Procedure Act), OSHA has focused on basic mechanical and chemical hazards rather than procedures. Major areas which its standards currently cover are: Toxic substances, harmful physical agents, electrical hazards, fall hazards, hazards associated with trenches and digging, hazardous waste, infectious disease, fire and explosion dangers, dangerous atmospheres, machine hazards, and confined spaces. Let’s look at them individually and define them so we can understand what they are.

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Just Tell It Like It Is

Disclose RECAD & Caveat Emptor in first conversation

The most important fact

an Alabama real estate agent can share with prospective buyers and sellers of real property in Alabama is that Alabama laws are different than most other states. Especially those states adjacent to Alabama because industry standards tend to spread across state lines. Alabama is a “Caveat Emptor” state. This simply means “buyer beware!”  To be more precise, Alabama is a modified Caveat Emptor state; because it exempts “New Homes” from Caveat Emptor. New homes are warranted by the builder while secondary (pre-existing) or used homes are not warranted by anyone. The purpose of “Caveat Emptor” is to notify the buyer that it is his responsibility to have the proper inspections performed on a home before they actually close on the sale. The buyer is not to rely on the seller to disclose all imperfections of a property, when making a decision whether to buy or not to buy.

Due to influence of markets in other states, some brokerage firms require their seller to complete a “Sellers Disclosure” form at the point of listing. [Read more…]