Full question:
We purchased two fourplex dwellings on a contract for deed from a gentleman. The purchases agreements were made as-is due to the seller never having lived on either property. No professional inspection was made of the property. No physical evidence of anything out of the ordinary were visible. After closing, our tenants informed us of a serious rat infestation issue, which was not disclosed to us. We called the seller who informed us that there had been a minor rat infestation issue, but that it had been handled. We have rats, and lots of them. The city fire department informed us yesterday that the rat infestation issue was such that at one point the health inspectors were called in. Again, this was not disclosed to us prior to closing or even before entering into a purchase agreement. What legal recourse do we have?
- Category: Real Property
- Subcategory: Seller's Disclosures
- Date:
- State: Minnesota
Answer:
When one party to a contract knows of a fact that has a bearing on the transaction, the failure to disclose this informa¬tion to the other party is called nondisclosure. Generally, the law does not attach any significance to nondisclosure. The theory is that it is preferable that the party lacking the knowledge ask questions of the party with the knowledge rather than imposing some sort of duty on the party with the knowledge to volunteer the information. Thus, generally, an agreement of the parties is not affected by the fact that one party did not disclose information to the other party. This is the general rule. Ordinarily there is no duty on a party to a contract to volunteer information to the other party. The nondisclosure of information that is not asked for by a party does not hurt the validity of the contract. For example, Jones wants to buy Smith's house. Jones, prior to signing the contract, makes an inspection of the house and sees several cracks in the roof and walls. He assumes that these cracks are just the result of the house settling. Smith makes no disclosure one way or another about the cracks. Jones buys the house and later discovers that the house has severe foundation problems. He sues Smith for the damages incurred in repairing the foundation problems. Under the general rule, Smith would be under no duty to disclose the foundation problems to Jones.
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