Failure to disclose defects – trial win

Posted by: Jun 24, 2016By Brian Stutheit

This month Stutheit & Gartland won a trial in Teller County on behalf of a real estate seller who was accused of failing to disclose roof leaks and water in his basement.

The home buyers undeniably had ceiling and attic water condensation problems which appeared after they moved in.  We persuaded the court that these leaks and their cause were unknown to our client when he sold the house.  In 2013 he had a few leaks in the home.  As a result of those leaks, he had a new roof installed not long before selling the house.  Thinking he had fixed his roof problem, he did not tell this buyers of the earlier leaks.   The roofer hired to put on the new roof created new and different defects unknown to our home seller when he listed the home for sale.  Our roofing expert witness was crucial in establishing that the new roof was the problem.

We persuaded the court that the basement water intrusion was the result of grading and driveway conditions which were open and obvious to a new home buyer.  Colorado law imposes a duty on a home seller to disclose known, latent defects to a home buyer.  “Latent” means hidden, or undiscoverable upon a normal inspection.

Under the standard real estate purchase and sale agreement which our client and the buyers signed,  the winner of the trial (our client) gets his attorney fees from the buyers.  Had he lost, the buyers would have gotten their attorney fees.  Trial of these cases is high risk and high reward.  Someone considering a lawsuit for fraud or nondisclosure, or being sued for failure to disclose,  better discuss those risks and rewards with an experienced attorney, who has tried these cases before.