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Legal Insights

The Importance of Full Disclosure in Construction Real Estate Transactions

At Morefield Speicher Bachman, LLP, we have extensive construction practice. Our construction lawyers regularly work in the commercial real estate practice area to reduce the risk of fraudulent behavior and to help resolve the issues if they occur. 

We regularly work with clients who find that the home or commercial property they purchased has significant problems that the seller did not disclose, or in some cases, even concealed. This happens more frequently than most buyers and sellers realize and it happens for a variety of reasons. We also work with clients who are selling real estate and who need advice to avoid issues with the buyer in the future.

When selling real estate, it is extremely important that you disclose information that affects the value of the property. This must be done on the front end during negotiations for the property. Not only is this the best practice and the honorable way to sell real estate, but it can also protect you from facing a lengthy, and costly, lawsuit down the line. We frequently advise clients about disclosure issues.

When buying real estate, it is extremely important that you ask questions and request information about any issues that are important to you or that may affect how you can use the property. We regularly advise buyers about their real estate purchases and can help buyers know the right questions to ask before signing on the dotted line.

In Missouri and Kansas, failure to disclose material information about a property can be considered fraudulent concealment. A seller who conceals problems with a piece of property may be subject to legal liability for fraudulent concealment and can be held legally liable to the fraud victim for the damages or losses arising from the concealment.

Fraudulent concealment differs from actual fraud.  Fraudulent concealment occurs when the seller conceals information he or she should reasonably know would affect the sales price of the property. Fraud occurs when the seller knowingly provides false information about the property. Most real estate contracts require the seller to reveal certain types of information about the condition of the property. If the real estate contract requires the seller to reveal information about the condition of the property, but the seller fails to do so, the seller can be liable for fraudulent concealment. If the seller makes false statements about the condition of the property, the seller can be liable for fraud. 

Our construction lawyers at Morefield Speicher Bachman, LLP, regularly work with contractors and property owners involved with commercial and residential real estate transactions. Attorney Stan Bachman has extensive experience helping contractors, subcontractors, and suppliers resolve disputes. He understands and appreciates construction industry clients because he’s “been there, done that” as a Kansas City commercial general contractor and business owner for 25 years before becoming a lawyer.

If disputes arise regarding your construction or business transaction, contact our legal team today. Our firm represents all participants in the industry, from contractors and subcontractors to engineers, architects, and owners. We represent clients at every stage of the construction process. Contact our legal team for help today.

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