Chapter 10 Defects Flashcards
Latent defects are defects which are unknown to the buyer and are so material to the enjoyment of the property that he might not have entered into the contract had he or she known that they existed. Latent defects are those which are:
(1) immediately visible to the eye of the average person.
(2) discoverable upon a reasonable inspection of the property.
(3) the responsibility of the licensee to discover.
(4) none of the above statements describe latent defects.
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Latent defects are facts which are unknown to the buyer and are so material to the enjoyment of the property that the buyer might not have entered into the contract had he or she known that they existed and:
(1) the defects are commonly known to exist.
(2) the defects are discoverable upon reasonable inspection of the property.
(3) the defects are visible to the eye of the average person.
(4) the defects are not discoverable upon reasonable inspection of the property.
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Garfield, a trading services representative, was the listing and selling representative with respect to the sale of Madison’s house to Tyler. After the sale completed, Tyler discovered that the main and lower floors of the house sloped. Garfield, Madison and Tyler had not noticed this before, although the defect was discoverable using ordinary diligence. Based on the above, which of the following statements is TRUE?
(1) Garfield had a duty to inspect the premises for soundness and structural defects before advertising it for sale.
(2) The sloping floor is a patent defect which should have been brought to Tyler’s attention.
(3) Neither Garfield nor Madison are liable to Tyler for failing to bring the defect to Tyler’s attention.
(4) Both (1) and (2) are true statements.
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A property is located in an area where most of the houses are connected to the sewer. The fact that the property in question is only connected to a septic tank creates a situation known as:
(1) a patent defect.
(2) caveat emptor.
(3) a latent defect.
(4) the Hedley Byrne principle.
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Which of the following will NOT serve to discharge a contract?
(1) an agreement between the parties
(2) the concept of frustration
(3) performance of the parties’ mutual obligations
(4) a patent defect
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what is a latent defect
A material latent defect is a physical defect that is not discernible through a reasonable inspection, and makes a property: dangerous or potentially dangerous to the occupants. unfit to live in. unfit for a buyer’s purpose, should that purpose be known to the sellers or by the industry professional.
the essential difference between a stigma and a defect is that
- a stigma increases the value of a property, whereas a defect decreases the value of a property
- a stigma must always be disclosed to the buyer, whereas a defect need not be disclosed to the buyer
- a stigma can not be discovered conducting a reasonable inspection and making reasonable inquiries whereas a defect is visible upon reasonable examination
- stigmas’ effect on property value depends on an individual subjective consideration whereas defects impact can be objectively determined
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anna is interest in purchasing elizabeths house. in an attempt to save money, instead of hiring a licensed home inspector, anna thoroughly inspects elizabeths house herself and does not find any defects or defficiencies. after the sale completes, anna discovers a major issue with the foundation with the house that will cost $55,000 to fix. as a result anna sues elizabeth for failing to disclose the issue with the foundation. which of the following is true
- because the deficiency in the foundation is a major issue, elizabeth is liable to anna even if she did not know about the defect.
- elizabeth would only be required to disclose the defect if anna specifically asked about the foundation
- annas claim against elizabeth for failing to disclose the foundation issue will likely fail if it can be shown that any qualified home inspector would have identified the issue
- the foundation issue is known as a property stigma
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