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Susan Gray, GRI, ABR, SRS, HHS

GRI,ABR,HHS,Chairman, Platinum Producer

 

REDHIBITION IN EASY TERMS

Redhibition is a state law, specific to Louisiana,  which compensates a buyer in the event they discover an unknown or unseen defect or problem with the sellers property. In some cases where the buyer completes a sale and then discovers a problem, the buyer may sue for damages in an action of redhibition, such as actual damages to fix the problem and may also collect monies which effectively reduce the sales price the buyer paid. A buyer may also rescind, or revoke, the sale, in an act of redhibtion. 

A great example of this is a new roof placed on top of an old roof. The new roof looked fine to both the buyer and roof inspector before the sale, but 3 years later the roof is leaking in several spots. The buyer discovers that an existing roof with decaying tar paper is underneath what he believed to be a new roof. In order to fix this problem both roofs must be removed so fresh tar paper can be installed. If the seller failed to disclose the existence of the old roof under the new roof, the buyer can sue for damages.

In Louisiana, a buyer can sue for up to 4 years from the act of sale date or within 1 year they discover the defect. Consequently, a seller isnt truly free of potential damages for 5 years. When a seller asks a buyer to sign a WAIVER OF REDHIBITION the seller is saying Take my property AS IS, I disclosed everything I knew or suspected was a problem and if down the road something major happens, I am not liable.

DISCLOSURE AND INSPECTIONS

Sellers are required to make certain disclosures about their property. The seller is not making any warranties, just telling the buyer what they have personal knowledge about. So if the seller says the house  has never had termites, it simply means that during his ownership period termites were not discovered. Disclosures became mandatory in July of 2004 and sellers who recieved previous disclosures should disclose what was told to them when they resell. When the buyer signs the disclosure statement, the buyer legally assumes (at the Act of Sale) the liability for any hidden defect the seller truthfully discloses as well as the ones not known. Now is the best time for the seller to disclose any hidden defect they may know about. Not doing so, falls under the area of FRAUD. Under fraud, the Waiver of Redhibition the buyer signed is no longer going to protect the seller from damages.

When the buyer receives their general inspection report, they may make known to the seller additional problems the seller didn't know about. When the final signatures are committed to this Property Condition Response ( appx. 15 days after the contract is signed), then the buyer assumes the liability for these defects and problems also.

In todays real estate market the majority of homes are sold with the Waiver of Redhibition. This trend to shift such major liabilities from the seller to the buyer is what leads buyers to inspect, inspect and reinspect. It is extremely important that the contract negotiations be well secured and the seller feels confident the buyer really wants their home prior to allowing open access to your home for inspections. Otherwise, the seller is allowing inspections to be done on their property which may lead to issues which become unfair to seller.

 

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