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…]

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…]