When can failing to disclose information substantiate a lawsuit?

When you are in the process of buying a home in New Jersey, you probably ask a number of questions regarding the house’s condition. After all, should an accident happen on your property, you could be held liable.

As a recent incident illustrates, when real estate agents fail to disclose critical information about a home, they may be held legally responsible. The New Jersey Law Journal published an article detailing a case in which two girls, ages 6 and 7, died due to an accident involving an elevator in the home.

The $2.3 million house later went up for sale, and potential homebuyers asked if the elevator was safe. According to a lawsuit, both the buyer and seller’s agents knew about the deadly accident, but they said nothing. Six days after the closing, the buyers learned of the tragic accident. The buyers had the elevator taken out of the home after an inspector found that an accident similar to what claimed the lives of the two young girls could have happened again. This prompted the defendants in the suit to try to get the case dismissed based on spoliation of evidence.

However, appeals court judges are allowing the suit to proceed. The judges found that failing to let the buyers know about the incident not only withheld physical information about the home, but it also created a psychological impairment similar to an issue that could arise if a murder or suicide had taken place.

Under New Jersey law, real estate agents are required to let potential buyers know about the physical condition of a property. While the law does not demand the disclosure of information regarding potential psychological impairments, the judges determined that because the homebuyer asked about the elevator, the information should have been shared.

While this information may be useful, it should not be taken as legal advice.

Source: New Jersey Law Journal, “Court Holds Agents Bound to Disclose Fatal Accident in Home,” Charles Toutant, Aug. 28, 2015.