A lawful contract cannot contain mistakes, misrepresentations, fraud, or be made under duress. Essentially, each party must provide valid consent to the contract; if consent is deemed unenforceable in some way, the contract may be cancelled or declared void. In real estate purchase contracts, the seller has an explicit duty to provide truthful information and disclose material facts about the property to avoid misrepresentation. These duties are incumbent on both the seller and the broker. The failure to disclose a known fact or to truthfully correct a mistaken belief could constitute fraud. These disclosures only pertain to material facts about the property or situations where the seller is aware that the buyer has incorrect information. The following are situations that could lead to the nullification of a contract due to a failure to disclose.
Relationship between broker and seller. A fiduciary relationship exists between the broker (the fiduciary) and the seller (the principal). A broker works on behalf of the seller and must protect the interests of the seller above all else. The broker is also obligated to act in good faith during the transaction. The relationship between the parties implies an obligation to disclose material facts regarding the property to one another.
Disclosing defects. The home might contain a hidden defect that is not apparent upon inspection or investigation. This can be a physical defect related to the property or a defect in the chain of title which renders the home subject to an encumbrance. The seller and broker are obligated under Georgia law to report defects to the prospective buyer. If the seller or broker is aware of an adverse condition in the home, which constitutes a material fact that the buyer has no knowledge of, the contract could be deemed voidable. Such actions may be regarded as misrepresentation or fraud on the part of the home seller.
Speaking truthfully about material facts. In some situations, the seller or broker may erroneously misstate a fact about the property. Even if this misrepresentation was unintentional, the broker or seller is obligated to correct the error as soon as he aware of it. If the seller knows a mistake was made and fails to correct it, the contract may be declared void.
The experienced team of attorneys at the Law Offices of Mark Weinstein, P.C. can help you litigate your real estate claims. Contact Mark Weinstein and his colleagues at (770) 888-7707 or visit them at http://www.markweinsteinlaw.com to find out how they can advise you.