What are the ethical obligations when selling one’s home?
Jewish law rejects the notion of caveat emptor (buyer beware) and has placed an onus of
disclosure on the seller of merchandise. The seller of a home – or any other object for
that matter – must reveal any “hidden” defects even those of a non material nature.
These would include the inefficiency of the furnace, holes in the floor under the carpet,
the probability that the roof will need replacing in the next year or so or even that the
house “creeks”. If the lack of disclosure is of such a magnitude that a reasonable buyer
would have walked away from the deal i.e. asbestos in the home, the buyer can render
even a closed deal null and void. Of course the vendor must ensure that the home be in at
least as good condition on the day of the closing as on the day the offer was accepted.
The seller can not shirk his responsibility by advising the buyer to have an inspection
done to the home. A prudent home buyer should still have an inspection, as, save for
those extremely serious and rare non disclosures, no recourse is given the buyer despite
the ethical laxity of the vendor. However the buyer is expected to have a basic
understanding of the marketplace and to perform some degree of due diligence. Obvious
deficiencies in a home need not be pointed out as it is the buyers responsibility to notice
them. These might include the lack of proper lighting, holes in the ceiling or the lack of
air conditioning on a hot summer day.
While Jewish law regulates the amount of profit one can make in the necessity sector (i.e.
food, rent) no such provision exists in the real estate market. Thus “auctioning” one’s
home to the highest bidder would present no moral issue. However our Sages have
ordained that one must first offer one’s neighbour the right of first refusal on a home.
This ordinance – applicable only when the buyer pays fair market value – prohibits one
from taking advantage of the natural right of someone to expand his property and thus
charge them a price higher than the norm.
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