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.
More Contracts Questions
Which of the following is required for a valid contract in California?
An “as is” clause in a general purchase contract:
A contract formed for an illegal purpose is considered:
After a residential purchase contract has been signed by both parties in Illinois, the buyer and seller verbally agree to change the closing date. What is the legally sound way to document this change?
Specific performance in North Dakota:
- → In a contract for deed (land contract), who retains legal title to the property until the purchase price is fully paid?
- → Which of the following is NOT required for a valid bill of sale?
- → A Nevada real estate salesperson is helping a buyer draft a purchase agreement. Which of the following is NOT a required element for a Nevada residential purchase agreement to be legally enforceable?
- → Sawyer Iverson is reviewing an Illinois issue in Joliet. The person assumes that attorney review automatically replaces every inspection, appraisal, or financing deadline in a standard Illinois residential contract. Which statement best applies?
- → Tom and Linda sign a purchase agreement for a home in Hartford, Connecticut. The agreement includes a financing contingency stating that if Tom cannot obtain a mortgage commitment within 21 days, either party may void the contract. On day 19, Tom's lender issues a written mortgage commitment. On day 22, Tom changes his mind and tries to void the contract by claiming the financing contingency was not satisfied. Which of the following best describes the legal status of the contract?
- → Avery Jenkins is reviewing an Illinois issue in Normal. The person asks what happens if neither attorney sends a disapproval or proposed change during the standard review period. Which statement best applies?
- → Under Montana law, a purchase agreement for residential real property becomes legally binding on the seller when which of the following occurs?
- → Johnny wants the seller's patio furniture included in his purchase of a house. Before the offer is signed and delivered to the seller, he asks his agent to attach a page covering the furniture to the offer. That attached page is best described as:
- → A bilateral contract in real estate is best described as:
- → A contract where one party uses threats to force the other party to sign is considered:
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