Nondisclosure & Fraud

The Scenario: When Sellers Hide the Truth

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.

Understanding Disclosure Requirements in Colorado

Colorado law creates two distinct types of disclosure obligations for home sellers and their agents. These requirements work together to protect buyers from fraud and ensure transparency in real estate transactions.

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

• 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. Understanding Colorado breach of contract elements can help homeowners evaluate their legal options.

Common Law Disclosure Obligations

Beyond the contract requirements, 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.

Broker Disclosure Responsibilities

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.

Types of Damages Available to Buyers

Primary Economic Damages

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.

This is similar to the damages available in construction defect claims, where homeowners can recover the costs necessary to fix property problems.

Additional Compensation

Beyond repair costs, the buyer may be entitled to other categories of damages, such as:

• Non-economic damages

• Prejudgment interest

• Attorney fees and costs (if the parties executed the Colorado Real Estate Commission's Contract to Buy and Sell Real Estate (Residential) and the buyer prevails in their lawsuit)

Understanding attorney fees in construction and real estate disputes can help buyers evaluate the full scope of potential recovery.

Taking Action Against Real Estate Fraud

If you have been the victim of real estate fraud or the failure to disclose home defects, consulting with an experienced attorney is crucial. A Denver real estate fraud lawyer can help you:

• Review and investigate your claims

• Build a case to help you recover adequate compensation

• Ensure that you receive the benefit of the bargain you entered into

For homeowners dealing with undisclosed defects, it's also important to understand how to document construction defects to strengthen your case.

Additionally, if construction-related issues are involved, learning about consumer fraud in Colorado construction can provide valuable insights into your legal options.

Next Steps

If you would like to set up a time to personally speak with a qualified attorney about your real estate disclosure case, consider scheduling an initial consultation. Taking prompt action is important, as there are time limits for pursuing these types of claims.