Denver Real Estate Fraud Lawyer

You just spent the last few months of your life looking at new homes. You find the one you love, sign the Sales Contract, and close on the purchase. During negotiations, the Seller filled out their Colorado Seller's Property Disclosure and all appears to check out. However, a few months after moving in to your new home, you discover significant issues with the property that were not disclosed to you. If you have found yourself in this unfortunate situation, you will want to consult with a real estate fraud attorney that can help you understand your rights. A qualified Denver realty fraud lawyer can walk you through Colorado real estate disclosure laws and prepare a case on your behalf against the seller and - possibly - their real estate broker.

Colorado Real Estate Disclosure Laws

Contractual Disclosure Obligations

If the seller has a licensed real estate broker handle the sale of the home on their behalf, then the parties will have executed Colorado Real Estate Commission's Contract to Buy and Sell Real Estate (Residential). Under Subsection 10.1 of this agreement, the seller is required to fill and and deliver to the buyer the most current Colorado Real Estate Commission's Seller's Property Disclosures. This document lists a myriad of categories of property conditions that the seller must address. Examples of adverse material facts that a Denver real estate fraud lawyer can help you assess include: building or zoning violations, water damage to the flooring, structural damage to a home caused by insect infestations or expansive soils or any type of lien filed against the property. If the seller has actual knowledge of an adverse property condition, they must disclose this on the form. A seller's failure to do so will make them liable for a breach of contract.

Common Law Disclosure Obligations

Beyond the contract, Colorado real estate disclosure law holds that "home sellers owe home buyers an independent duty to disclose latent defect of which they are aware." In re Gattis v. McNutt*, 2013 COA 145, ¶2. Notwithstanding their contractual obligations, a home seller must disclose all "latent but known defects." A latent defect is one that is a hidden or concealed defect that could not have been discovered by a reasonable and customary observation or inspection performed by the buyer. Like the buyer, their real estate broker also has an affirmative duty to disclose adverse property conditions they have actual knowledge of. Baumgarten v. Coppage, 15 P.3d 304, 307 (Colo. App. 2000). Accordingly, though the broker is not obligated to fill out the Seller's Property Disclosures, they should review this document to make sure that all adverse property conditions have been disclosed. Their failure to do so, will subject them to liability to the buyer.

Circumstances that May Stigmatize the Property

While the seller and broker have an obligation to disclose adverse property conditions that are actually known to them, there is an important caveat. There is no obligation to disclose facts or suspicions that "could psychologically impact or stigmatize" the owner's property. C.R.S. § 38-35.5-101. There is minimal guidance in Colorado as to what equates to a psychological impact or stigmatization of a property. However, Colorado statute identifies two specific circumstances are excluded from a seller or broker's disclosure obligations:

  1. a prior occupant was diagnosed with AIDS, HIV, or other disease that is highly unlikely to be transmitted and

  2. the property was the site of a homicide, suicide, or other felony.

Potential Damages for Real Estate Fraud

Assuming the seller or broker did breach their disclosure obligations, a buyer of property can claim several types of damages against the seller and broker. The primary category of damages will be the economic cost to repair or replace the undisclosed or misrepresented condition. Beyond that, the buyer may be entitled to other categories of damages, such as non-economic damages and prejudgment interest. Assuming the parties' executed the Colorado Real Estate Commission's Contract to Buy and Sell Real Estate (Residential), the buyer will also be entitled to recover attorney fees and costs if they prevail in their lawsuit.

Contact a Colorado Real Estate Fraud Lawyer Today

If you have been the victim of real estate fraud or the failure to disclose home defects, I would be more than happy to speak with you. I am a Denver real estate fraud lawyer that has helped many buyers just like yourself recover damages against sellers and brokers. I can help you review and investigate your claims, and build a case to help you recover adequate compensation to ensure that you receive the benefit of the bargain you entered into. If you would like to set up a time to personally speak with me, please schedule an initiation consultation with me. I look forward to the opportunity to work with you.