Legal Updates

A property seller is obliged to check the condition of the property prior to the sale to avoid fraudulent inducement of the purchaser

December 1, 2019

After purchasing a house, the purchasers discovered that part of the house was built without a building permit and therefore the transfer of rights to them cannot be recorded.
The Court held that the sellers should compensate the purchasers for the discrepancy. Even if a property seller does not know of a discrepancy, because of the obligation to disclose facts that under law, common practice or the circumstances are required to be disclosed, the sellers had to check the status of the property prior to the sale and therefore the non-disclosure constitutes a fraudulent inducement of the purchasers. The obligation of disclosure applicable to to the seller may not be conditioned by the parties and therefore even if the agreement notes that the purchaser has checked the property, it does not reduce the seller's responsibility.