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Latent Defect Questions

A latent defect is an issue in property that wasn't detectable prior to a sale. Generally, the law states that a buyer should protect themselves when purchasing any property by having a contract as part of the sale. In the contract, a guarantee clause should state that any latent defects that appear after the sale are to be covered by the seller. This enables the buyer to recover damages from the seller if issues arise after the sale. Below are a few of the more commonly asked questions about latent defect.

I purchased a vehicle on March 29th from a used car dealer in NJ. I noticed a problem the next day. I spoke to a manufacturer's dealership for advice. Testing to find out the problem would be expensive (CAM test, timing test, etc, 5 hours of labor). I called the seller, told them the problem and returned the car on April 2 to be fixed. I have gotten the run around since. What can I do?

A latent defect is an issue within property that could not be detected by an inspection prior to the sale. When dealing with property (real estate and personal property) a basic rule of caveat emptor (let the buyer beware) is used and it is the responsibility of the buyer to examine the property prior to purchase. However, many times an examination is not enough to uncover issues with a product that would only be discovered under destructive testing that the person selling would allow. For example, a seller wouldn't be expected to let a buyer take apart a car engine prior to buying it.

The buyer is expected by law to protect themselves from unseen defects that cannot be found under normal circumstances. This is where the term latent defect is used in a contract of sale. Latent defect clauses allow the buyer to recoup damages from the seller if issues are found in the property after the sale is final. Usually, the clause will read; the seller will be responsible for paying for any repairs.

Without an agreement or a contract, the seller cannot automatically claim latent defect against the seller once the issue is discovered. However, it is often presumed that the seller knew of the issue before the sale and failed to mention it to the buyer. In situations like this, the seller has to prove that there was no way of knowing about the issue prior to the sale. If this can be proven, the buyer's claim will fail.

In the event that the seller purposely hid faults in the property or deceived the buyer about any issues, the buyer would generally win any disputes of responsibility to make repairs. However, if the seller can show that the buyer was aware of an issue before the sale, and bought the property regardless, the seller would not be responsible.

I just bought a car from a private party and I did a closer inspection when I got home and found out the front bumper, fenders, and hood aren't original because they have a different VIN than the car or the VIN sticker has been removed or painted over. Is there anything I can do? I'm in California.

When buying a used vehicle in the state of California, the sale is considered "as is" and any latent defect found after the sale is the buyers responsibility. The only way you could prove foul play is if you directed asked the seller about an issue and the seller lied. Even then, it is extremely difficult to back out of a used car sale unless you have absolute proof of deceit on the seller's part. In this situation, you would have to prove that the seller isn't a private seller, but someone who buys and sells cars and deliberately deceived you during the sale.

I purchased an used 2008 Freightliner semi truck in October 2011. Since then, it has been in the shop 95% of the time and I have spent approximately $10,000 not including the days I have missed work due to it being in the shop. I purchased a warranty through the dealer but it is only for the engine. Is there anything else I can do? It has been in a specialized caterpillar shop numerous times with the same problem due to the new Ca regeneration system.

The purchase of the used semi is considered an "as is" purchase and any latent defects found after the sale is the responsibility of the buyer. If the repairs are not covered by a warranty, the seller isn't required to assist in the repair costs. There really isn't any legal recourse for you in this situation. However, if you could show that the part has a manufacturer defect, you could have a claim against the manufacturer for product liability. You will need to hire an attorney and an expert who can prove that the part was defective when it left the manufacturer.

If you have issues or questions about latent defects, you can ask an Expert in consumer protection law to evaluate the particulars of your case and provide legal insights that may help you decide on the best course of action available to you.
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