Latent Defect vs. Material Fact

What is a Latent Defect?

A latent defect is anything that the homeowner knows is a defect in the house. They are things that wouldn’t show in a simple inspection and if someone were walking through the house, they wouldn’t necessarily know of this defect or be able to see it.  Mold, previous fires, issues with the foundation or any kind of leaks are prime examples of latent defects. It’s important to disclose these defects because they could threaten a person’s health or safety.

What is a Material Fact?

A material fact is anything about the property that could affect the decision of whether to purchase the house or affect the offer price. It could be something that happened in the home, something that is coming to the area or anything that may affect the property value.

In short, a latent defect is something wrong with the home and a material fact is something that could change the potential buyers mind about buying the home.

Let’s Talk Disclosure

It is required in the state of MD to disclose latent defects to potential buyers.  When the home is listed, the seller will fill out a property disclosure or disclaimer form.  The disclosure is a 3-page form with several questions about the house such as; Are there settlement issues? Do the plumbing and electric work? Does water stand on the property for more than 24 hours after a heavy rain? The disclosures should be made in writing and be completed before a buyer would make an offer on the home.

Material facts are disclosed at the discretion of the seller depending on the state the property is being sold in. Interesting Fact:  In Maryland, if there is a homicide, suicide or haunting in the house, the seller and the seller’s agent are not required to disclose that information.


Posted in Buyers, Sellers