Purchasing a home is a major investment, and discovering a serious problem after closing can quickly turn that milestone into a stressful situation. A leaking roof, significant water intrusion, unsafe wiring, structural damage, plumbing problems, or another hidden condition may leave a buyer wondering whether the seller should have disclosed the issue and what options are available.
Pennsylvania law requires sellers in covered residential real estate transactions to disclose known material defects before the buyer and seller sign an agreement of transfer. Whether a particular problem qualifies as a material defect, whether the seller knew about it, and what remedies may be available depend on the specific facts.
What Is a Material Defect Under Pennsylvania Law?
Under Pennsylvania law, a material defect is a problem with residential real property, or any portion of it, that would have a significant adverse impact on the property’s value or that involves an unreasonable risk to people on the property.
The law also makes an important distinction: a structural element, system, or subsystem is not considered materially defective merely because it is near, at, or beyond the end of its normal useful life. Age alone does not necessarily make a condition a material defect.
Depending on the circumstances, potential material defects may involve issues such as:
- Significant roof leaks or deterioration
- Foundation or structural problems
- Serious water intrusion or drainage issues
- Defective sewer or septic systems
- Unsafe electrical conditions
- Major plumbing failures
- Heating or air-conditioning problems
- Wood-destroying insects or substantial pest damage
- Hazardous substances or environmental concerns
- Other conditions that significantly affect property value or create an unreasonable safety risk
Whether a particular condition qualifies as a material defect depends on the nature and seriousness of the problem rather than simply the age of the property or one of its systems.
What Does Pennsylvania’s Real Estate Seller Disclosure Law Require?
Pennsylvania’s Real Estate Seller Disclosure Law generally requires a seller in a covered residential real estate transaction to disclose known material defects by completing the applicable portions of a property disclosure statement.
The seller must provide a signed and dated disclosure statement to the buyer before the buyer and seller sign the agreement of transfer.
The property disclosure form required by Pennsylvania law is promulgated by the Pennsylvania State Real Estate Commission. The disclosure statement addresses numerous areas of the property, including:
- The roof
- Basements and crawl spaces
- Termites, wood-destroying insects, dry rot, and pests
- Structural problems
- Additions, remodeling, and structural changes
- Water and sewage systems
- Plumbing
- Heating and air conditioning
- Electrical systems
- Soils, drainage, boundaries, and sinkholes
- Hazardous substances
- Condominium and homeowners association matters
- Legal issues affecting title or use of the property
- Certain stormwater facilities
The disclosure requirement focuses on information known to the seller. Pennsylvania law does not require a seller to conduct a special investigation solely to complete the disclosure statement.
What Must a Seller Disclose?
A seller must not make representations that the seller knows or has reason to know are false, deceptive, or misleading, and the seller must not fail to disclose a known material defect.
This means the central questions in many post-closing defect disputes include:
- Was there a material defect?
- Did the defect exist before the sale?
- Did the seller know about the defect?
- Was the condition properly disclosed?
- Did the buyer suffer damages because of the failure to disclose?
A seller may not necessarily be liable for every inaccurate statement or omission. Pennsylvania law contains protections for sellers in certain circumstances, including where the seller had no knowledge of the problem or reasonably relied on information from qualified third parties.
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What Happens if Information Changes Before Closing?
A disclosure statement can become inaccurate after it is delivered. Pennsylvania law addresses that situation as well.
If information previously disclosed becomes inaccurate before final settlement because of a later event, occurrence, or agreement, the seller must notify the buyer of the inaccuracy.
For example, if a significant condition develops after the initial disclosure but before settlement, the fact that the original disclosure statement was accurate when completed does not necessarily end the seller’s disclosure responsibilities.
How Do You Prove a Seller Failed to Disclose a Defect?
Discovering a defect after closing does not automatically establish that the seller violated Pennsylvania law. A buyer pursuing a nondisclosure claim generally needs evidence connecting the condition to the seller’s disclosure obligations.
Relevant evidence may include:
- The seller’s property disclosure statement
- The agreement of sale
- Inspection reports
- Repair estimates and invoices
- Photos or videos of the condition
- Prior repair records
- Contractor or expert reports
- Communications between the parties
- Evidence showing that the condition existed before the sale
- Evidence indicating that the seller knew about the condition
These cases can become fact-intensive because a buyer may need to distinguish between a defect that existed before the transaction and a problem that first developed afterward.
Found a defect after closing? Talk to our Media, PA real estate lawyers about your options.
What if the Home Inspector Missed the Defect?
A home inspection is an important part of many residential real estate transactions, but an inspection does not guarantee that every hidden condition will be discovered.
Whether a home inspector may be responsible for a missed problem depends on the circumstances, including the scope of the inspection, what was reasonably observable, the terms of the inspection agreement, applicable professional standards, and the nature of the alleged defect.
The existence of an inspection also does not automatically eliminate a seller’s separate obligation to disclose known material defects.
Are Real Estate Agents Responsible for Undisclosed Defects?
Pennsylvania’s Real Estate Seller Disclosure Law provides that an agent for either the seller or buyer is not liable for a violation of the disclosure law unless the agent had actual knowledge of a material defect that was not disclosed to the buyer or had actual knowledge of a misrepresentation concerning a material defect.
Other duties may arise under separate laws or professional obligations, so liability should be evaluated based on the particular conduct involved.
Does an “As Is” Sale Eliminate the Seller’s Disclosure Duties?
An “as is” provision does not automatically allow a seller to conceal a known material defect.
Pennsylvania’s disclosure statute establishes disclosure duties for covered residential transfers, and the law expressly recognizes that other disclosure obligations intended to prevent fraud, misrepresentation, or deceit may also apply.
An “as is” provision may affect certain contractual rights and risk allocation, but its effect depends on the agreement and the facts. Buyers should not assume that an “as is” clause automatically eliminates every potential claim concerning a concealed or misrepresented condition.
What Should You Do After Discovering a Defect?
If you discover a serious problem after purchasing a home, preserving evidence early can be important.
Consider taking the following steps:
- Photograph and document the defect
- Keep inspection reports and disclosure documents
- Save emails, text messages, and other communications relating to the property
- Obtain written evaluations or repair estimates from appropriate professionals
- Determine whether prior repairs or attempted repairs may have occurred
- Avoid destroying evidence of the original condition when emergency repairs are not required
- Review the seller disclosure statement and agreement of sale
- Speak with a Pennsylvania real estate attorney about applicable deadlines and potential claims
If an immediate repair is necessary to protect people or prevent additional property damage, document the condition thoroughly before and during the repair whenever reasonably possible.
How Long Do You Have to Bring a Seller Disclosure Claim?
An action for damages based on a violation of Pennsylvania’s Real Estate Seller Disclosure Law must be commenced within two years after the date of final settlement.
That does not necessarily mean every possible legal claim involving a real estate defect is governed by the same deadline. Different causes of action can have different requirements and limitation periods.
Because determining the applicable deadline can be critical, buyers who discover a significant defect should consider obtaining legal advice promptly rather than waiting until the two-year anniversary approaches.
What Damages Can Be Recovered for a Disclosure Violation?
Under Pennsylvania’s Real Estate Seller Disclosure Law, a person who willfully or negligently violates a duty imposed by the statute may be liable for the actual damages the buyer suffers because of the violation.
The statute also makes clear that this remedy does not necessarily eliminate other remedies that may exist under other Pennsylvania law.
Depending on the facts, a buyer may assert additional legal claims such as fraud, misrepresentation, breach of contract, or a claim under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law.
The remedies available under those claims are not automatic. For example, Pennsylvania’s consumer protection law allows a court, in an appropriate private action, to award actual damages and gives the court discretion to award up to three times actual damages as well as costs and reasonable attorney fees. Whether those remedies are available depends on the particular claim and evidence.
Is the Seller Responsible for Problems That Develop After the Sale?
Not every post-closing problem creates a claim against the seller.
Pennsylvania’s Real Estate Seller Disclosure Law does not provide a cause of action under that statute for material defects that develop after the buyer and seller sign the agreement of transfer or defects that occur after final settlement.
The distinction can be important. A condition discovered after closing may have existed beforehand, or it may truly have developed after the transaction. Expert evaluation, maintenance records, photographs, prior repairs, and other evidence may help establish when the problem began.
Can a Seller Correct or Update the Disclosure Statement?
Yes. Pennsylvania law permits a seller to amend a disclosure in writing before the seller and buyer sign the agreement of transfer.
In addition, if information previously provided becomes inaccurate before final settlement because of a later event or occurrence, the seller must notify the buyer.
How Can Homebuyers Protect Themselves Before Closing?
Although Pennsylvania law imposes disclosure obligations on sellers, buyers should still perform appropriate due diligence before purchasing a home.
Steps may include:
- Carefully reviewing the seller’s property disclosure statement
- Obtaining an independent home inspection
- Following up on concerns identified during the inspection
- Obtaining specialized inspections when appropriate
- Reviewing permits, repair records, and other available property information
- Making sure important representations are documented in writing
- Reviewing the agreement of sale and any inspection contingencies
- Consulting with a real estate attorney when significant legal or property issues arise
Taking these steps cannot eliminate every possible risk, but careful due diligence can help buyers identify issues before they become post-closing disputes.
Talk With a Pennsylvania Real Estate Attorney About an Undisclosed Defect
Discovering a serious property defect after closing can involve questions about the seller’s knowledge, disclosure obligations, inspections, contractual terms, damages, and filing deadlines.
Gibson & Perkins, PC assists clients with Pennsylvania real estate transactions and disputes. If you purchased a home and later discovered a condition you believe should have been disclosed, our attorneys can review the disclosure statement, transaction documents, available evidence, and the circumstances surrounding the defect.
Contact Gibson & Perkins, PC to schedule a consultation and discuss your options.
Frequently Asked Questions About Material Defects in Pennsylvania Real Estate
What is a material defect under Pennsylvania real estate law?
A material defect is a problem with residential real property, or any portion of it, that would have a significant adverse impact on the property’s value or that involves an unreasonable risk to people on the property. A structural element or system is not materially defective merely because it is near, at, or beyond the end of its normal useful life.
Does a Pennsylvania seller have to disclose known material defects?
Generally, yes. In a covered residential real estate transfer, Pennsylvania law requires the seller to disclose known material defects by completing the applicable portions of a property disclosure statement and delivering the signed and dated statement before the seller and buyer sign the agreement of transfer.
Who creates Pennsylvania’s property disclosure form?
The Pennsylvania State Real Estate Commission promulgates a property disclosure form that satisfies the requirements of the Real Estate Seller Disclosure Law. Sellers may use another form that complies with the statute and includes additional information.
Does a seller have to investigate the property to find defects?
The Real Estate Seller Disclosure Law does not require a seller to conduct a special investigation or inquiry solely to complete the disclosure form. The seller must, however, disclose known material defects and must not make statements the seller knows or has reason to know are false, deceptive, or misleading.
Does an “as is” clause eliminate the seller’s duty to disclose?
Not automatically. Pennsylvania’s seller disclosure law still imposes disclosure obligations in covered transactions, and other duties may exist to prevent fraud, misrepresentation, or deceit. The effect of an “as is” clause depends on the contract and circumstances.
Can I sue a seller after closing for an undisclosed material defect?
Potentially. Whether a viable claim exists depends on facts including whether the condition was a material defect, whether it existed before the transaction, whether the seller knew about it, what was disclosed, and whether the buyer suffered damages.
How long do I have to file a claim under Pennsylvania’s Real Estate Seller Disclosure Law?
An action for damages for a violation of Pennsylvania’s Real Estate Seller Disclosure Law must be commenced within two years after the date of final settlement. Other potential causes of action may have different requirements or deadlines.
Can a real estate agent be liable for an undisclosed defect?
Under Pennsylvania’s Real Estate Seller Disclosure Law, an agent is not liable for a violation of that statute unless the agent had actual knowledge of an undisclosed material defect or actual knowledge of a misrepresentation relating to a material defect.
What damages are available for violating Pennsylvania’s seller disclosure law?
A person who willfully or negligently violates a duty imposed by Pennsylvania’s Real Estate Seller Disclosure Law may be liable for the buyer’s actual damages resulting from the violation. Additional remedies may be available under other laws depending on the facts and legal claims involved.
What should I do if I discover a serious defect after buying a home?
Document the condition, preserve your disclosure and inspection documents, obtain appropriate professional evaluations, keep records of repair costs and communications, and consider speaking with a Pennsylvania real estate attorney promptly about the evidence, possible claims, and applicable deadlines.
