A Washington Court of Appeals had harsh words for the sellers of a house who concealed rot damage and did not disclose the defect to the buyers, calling their acts reprehensible. Yet in Douglas v. Visser, decided on February 25, 2013, the court ruled that the sellers were not liable for these acts, were entitled to 18 percent interest on the amounts due, and could recover their attorney fees in defending the buyers’ claims.
The court felt constrained by the law to rule in the sellers’ favor. The buyers had obtained an inspection of the house before purchasing it, and the inspection revealed some presence of rot, but the problem for the buyers was that they did not ask the sellers any specific questions about it. The law is that when a buyer is on notice of a defect, it must make further inquiries of the seller. Failure to do so could mean that the seller is not liable for the defect even if the defect is worse than anyone contemplated and even if the seller knew about it. The one exception to this rule arises if further inquiry would be fruitless, and in this case, there was no evidence to support the exception.
The important lesson for a buyer to preserve claims against its seller is to not only inspect real property before purchase, but if there is anything disclosed in the inspection report that could reveal a possible defect, to follow up with the seller, preferably in writing, and ask specific questions about the potential defect. Further inquiry could also result in the buyer receiving additional information to negotiate further inspections or repairs, or, in the alternative, could allow the buyer to terminate the transaction.