Alabama is generally considered a:
Correct Answer
B) Caveat emptor (buyer beware) state — sellers have no mandatory disclosure form, but cannot actively conceal or misrepresent known defects
Alabama follows the caveat emptor doctrine more than most states. There is no mandatory statutory seller disclosure form for residential property. However, sellers still cannot commit fraud — they may not actively conceal or misrepresent known material defects. The burden is on the buyer to inspect and discover defects.
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Related Topics & Key Terms
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Related Concepts
A financing contingency makes the purchase contract conditional upon the buyer obtaining mortgage approval within a specified time period. If the buyer cannot secure financing, they can cancel the contract and receive their earnest money back.
An inspection contingency gives the buyer the right to have the property professionally inspected within a specified time frame and to negotiate repairs or cancel the contract based on the findings.
Liquidated damages are a predetermined amount of money specified in the contract that the non-breaching party is entitled to receive if the other party breaches. In real estate, the earnest money deposit typically serves as liquidated damages.
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- → A Rhode Island licensee encounters a listing contract is drafted. What should the licensee remember?
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- → A Hawaii licensee is reviewing the commission asks to inspect escrow and trust records. What is the best answer?
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