Does the warranty of merchantability apply to a house?

It was financed for 30 years. We realized after purchase that the wiring, plumbing, etc. was original and/or substandard. Should not have ever passed inspection. My husband is disabled and I was ignorant of purchasing a home. Now, 10 years in the house, it is

nearly condemnable. Other houses in neighborhood are being torn down. I owe way more than it’s worth. Is there any legal way to get out of house without defaulting on loan?

Asked on January 13, 2018 under Real Estate Law, Missouri

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

No, based on what you write, there is no way out of the loan. First, the loan is between you and the lender, not you and the seller, and the lender has no responsibility or liability for issues with the property--the seller may in some circumstances, but not the lender. The lender's only obligation is to lend the money (provide the financing); if they do, they you are obligated to repay them regardless of what issues occur with the home. The plumbing, etc. issuses provide on basis to escape your responsibilities under the mortgage/financing.
And while you can sometimes hold a seller liable if they fail to dislose hidden issues (ones not reasonably discoveable by you before you buy, also called "latent" issues) which were known to them, you face two signficant obstacles:
1) First, the problem must have been known to the seller, who intentionally hid or failed to disclose it. It may be very difficult to prove--especially after 10 years--that they knew of these problems. If they did not know there were problems with the wiring or plumbing, you cannot successfully sue them.
2) The statute of limitations, or time within which you must sue, for fraud (for lying) is 10 years in your state: you may be out, or about to be out, of time.


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