A buyer in Laconia, NH submits an offer to purchase a property enrolled in New Hampshire's Current Use program under RSA Chapter 79-A. The offer does not mention the Current Use status. The seller accepts the offer without disclosing that removal of the land from Current Use at closing will trigger a land use change tax of approximately $18,000. After the contract is signed, the buyer's attorney discovers the Current Use status during title review. The buyer seeks to rescind the contract. Which of the following best describes the buyer's strongest legal basis for rescission?
Correct Answer
D) The buyer may rescind based on the seller's failure to disclose a material fact affecting the property's cost
Under New Hampshire law, sellers are required to disclose known material facts that would affect a buyer's decision to purchase or the value of the property. The existence of Current Use status under RSA Chapter 79-A and the resulting land use change tax — which can amount to 10% of full market value and is triggered upon removal from the program at sale — is a material fact that significantly affects the buyer's cost of acquisition. The seller's failure to disclose this information gives the buyer a strong basis to seek rescission for misrepresentation or concealment of a material fact, which may also implicate the NH Consumer Protection Act (RSA Chapter 358-A).
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Related Topics & Key Terms
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Related Concepts
A time is of the essence clause in a contract means that all deadlines and dates specified in the agreement are strictly enforceable, and failure to meet them constitutes a material breach.
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
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