A seller in Carroll County accepts a buyer's offer and both parties sign a contract. The contract does not contain a home inspection contingency. Three days after signing, the buyer discovers through an independent inspection that the property has significant foundation issues that were not disclosed by the seller. The buyer wants to void the contract. The seller refuses, pointing out that there is no inspection contingency. Under Maryland law, which of the following best describes the buyer's legal options?
Correct Answer
B) The buyer may void the contract under the Maryland Residential Property Disclosure Act if the seller failed to disclose a known material defect
Under the Maryland Residential Property Disclosure and Disclaimer Act (Md. Code Ann., Real Prop. §§ 10-702 et seq.), a seller of residential property is required to disclose known material defects. If the seller knew about the foundation issues and failed to disclose them, the buyer may have grounds to void the contract based on the seller's fraudulent concealment or violation of the disclosure statute — regardless of whether an inspection contingency was included. The absence of an inspection contingency does not waive the buyer's rights under the disclosure law or common law fraud principles. Additionally, if the seller provided a full disclosure (not a disclaimer), failure to disclose known defects may give rise to contract rescission and/or damages.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
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.
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