1. Sellers failure to disclose material latent defects is a basis for rescinding the sales contract
1.1. Abrogates the doctrine of Caveat Emptor, "let buyer beware"
1.2. Where imposed, the buyer may rescind the contract or seek damages.
2. Caveat Emptor
2.1. Minority View
2.2. Absent special fiduciary relationship, with the buyer, a seller owes no duty to disclose either patent or latent defects
2.2.1. Buyer holds the burden to reasonably inspect the property.
2.3. Seller cannot misrepresent or conceal facts to mislead buyers
2.3.1. To fraudulently misrep
2.3.1.1. Represented facts
2.3.1.2. Material to the sale
2.3.1.3. Made falsely w/ knowledge of the falsity
2.3.1.4. W/ intent to mislead purchaser into relying on representation
2.3.1.5. purchaser relies on representation
2.3.1.6. Purchaser suffers some injury proximately caused by his reliance on the misrepresentation
2.4. Exceptions
2.4.1. Precious relationship that creates a fiduciary duty
2.4.2. Active concealment of a defect to the property
2.4.3. Misrepresentation of a material fact to the sale
3. Duty to disclose latent defects
3.1. Majority view
3.1.1. Only applies to residential properties. Commercial properties use Caveat Emport
3.2. Requires the seller to disclose of material latent defects to the purchaser
3.2.1. Material Defect=
3.2.1.1. materially affects the property's value or
3.2.1.2. could significantly impair the occupant's health and safety, or
3.2.1.3. the seller knows affects the desirability of the property to the buyer
3.2.2. Latent Defect
3.2.2.1. Defects known to the seller and not discover-able by the buyer upon reasonable inspection