Kansas and Missouri are both “buyer beware” states. Caveat emptor. However, that doesn’t mean you can get away with hiding problems with your house when selling. Sellers in both states are required to disclose known defects to buyers when selling their home, but that doesn’t always happen. Whether you’re downplaying a known issue or quietly hoping it goes away, you’re asking for trouble. One Cinch Home Services study found ~60% of sellers admit to not disclosing a known problem. That’s a good way to end up in court! Here’s what you need to know to protect yourself from being sued when selling your house.
I’ve Seen It Myself
Being a real estate agent in Kansas City since 2011, I’ve seen examples of people getting caught not disclosing issues. In one case, my clients were looking at a house with a finished basement. The basement smelled musty and there were mineral deposits visible on the carpet. When I asked about this issue, the other agent said the sellers had noticed dampness after strong rains, but that the sellers had no other information.
When calling around looking for bids to waterproof the basement, we found a company who had actually bid work for this house that was never done. The bid was tied to the address in their system and it pulled right up when we asked about scheduling an inspection. This was a bid they gave the prior owners who never disclosed the issue to the current owners.
I relayed the information to the other agent who said her sellers had only owned the house for a year. They admitted the moisture issue hadn’t gotten bad until the wet spring weather right around the time my buyers saw the house. My buyers moved on without putting in an offer, but those sellers said they were going to pursue legal action against the former owners.
I honestly don’t believe those sellers were trying to hide anything. They’d been lied to by the prior owners and were only learning about the water problem at the same time we were. Regardless, the paper trail was there and the prior owners were exposed for not disclosing the issue.
Top Reasons Home Buyers Sue Sellers
Failure To Disclose: The most common reason buyers sue sellers is for failure to disclose known defects. Sellers in KS and MO must disclose known issues that could affect the property’s value, desirability, habitability, or safety. Examples include: water damage/leaks, mold, foundation/structural problems, roof issues, pest infestations, septic/sewer failures, unpermitted work, environmental hazards like radon or lead, or prior repairs.
Misrepresentation of Property Details: Inaccurate statements about square footage, condition, zoning, or HOA rules can lead to lawsuits. This most commonly occurs because of false advertising or statements made in error.
Breach of Contract: This includes failing to meet deadlines, not completing agreed repairs, disputes over earnest money, removing fixtures/appliances that were supposed to stay, or backing out of the deal improperly. Purchase agreements are binding contracts, and each party can pursue enforcement of the contract and/or damages when the other party breaches the contract.
Boundary, Title, Easement, or Survey Issues: Undisclosed encroachments, liens, easements, or property line disputes that buyers discover later. That’s why it’s important to work with a title company early in the process to prevent these issues up front.
For Sale By Owner (FSBO)
Did you know that For Sale By Owner transactions are more likely to result in a lawsuit than transactions involving a real estate agent? FSBO sellers often skip or mishandle disclosure. Sometimes sellers intentionally hide defects, but more than likely they simply didn’t know what to disclose. In Kansas and Missouri, the disclosure obligations are the same whether you have an agent or not, and “I didn’t know I had to disclose that” is not a legal defense. Without professional guidance, it’s easy to overlook material defects, make inaccurate condition assumptions, or use contracts that don’t adequately protect either party. For more information on FSBO transactions, check out How Successful Are ‘For Sale By Owner’ Sellers?
Waiving Inspections in “HOT” Markets
The post-Covid trend of buyers waiving inspections to beat out competing offers led many of them to feel ripped off once they got the keys. What some sellers didn’t realize at the time is that buyer inspections actually protect both parties. When a buyer inspects a property, they either find the deal-breakers and address them before closing, or they proceed with full knowledge of the home’s condition. This at least gives the seller a legitimate due diligence defense if disputes arise later. Without that inspection, it’s easy for the buyer to say they didn’t get a fair shake. When that buyer later discovers a material defect, the reason they waived inspections becomes irrelevant, because they may still have recourse against you.
Prevention
The good news is that most lawsuits stemming from home sales are avoidable. If working with a real estate agent in the Kansas City area, find one who’s a member of the Kansas City Regional Association of REALTORS®. They have excellent disclosure forms that should cover most of your bases. Remember to fill them out honestly based on your actual knowledge. You don’t have to become an engineer or home inspector yourself. You just need to state what you know.
Simply put, don’t guess, don’t minimize, and don’t leave items blank hoping no one notices. Document everything: repairs you’ve made, bids you’ve received, contractors you’ve hired. That paper trail works in your favor when a buyer raises a concern after closing. Encourage buyers to do their own inspections rather than waiving them. As discussed above, that protects you too. And if you’re unsure whether something needs to be disclosed, consult your real estate agent or an attorney before listing the house for sale.
Have you fixed issues with your house? Disclose!
Have you received bids for repairs or upgrades that you never actually completed? Disclose!
If Things Go Wrong Anyway…
We’ve talked about how sellers can avoid lawsuits, but what can buyers do when they feel like they’ve been a victim of one or more of the issues listed above? The cheapest option is to work directly with the seller to resolve the issue. A phone call or written request costs nothing and sometimes that’s all it takes. Keep in mind that buyers have their own responsibility here. There’s a big difference between “I didn’t do my research” and “I got ripped off,” and an attorney will ask that question before taking your case.
If a direct resolution fails, consulting a real estate attorney is the logical next step. They can give you a realistic assessment of whether you have a case and what it might cost to pursue it. Keep in mind that proving what a seller knew about their home can be difficult, and the outcome isn’t always clear cut.
As always, I’m a real estate agent, not a lawyer. Nothing in this article should be taken as legal advice. If you’re facing a potential dispute, consult a real estate attorney for guidance specific to your situation.
SEARCH HOMES FOR SALE
WHAT’S MY HOME WORTH?
Justin Rollheiser – Real Estate Agent
REALTOR®
Keller Williams Realty Diamond Partners, Inc.
13671 S Mur-Len St, Olathe, KS 66062
Cell 913-800-7653
Office 913-322-7500
www.JustinRollheiser.com
Comments or Questions?