Seller Liability for Defective Repairs

The seller of real property can be responsible for false statements to a buyer, even if the seller did not realize the statements were false at the time they were made.

The Maryland Appellate Court issued a decision in October 2026, in the case of 3913 NEH, LLC v. Salinas, clarifying Maryland law when the seller of residential real property is later sued for alleged latent defects in the property. NEH purchases properties and then renovates them for resale. As part of the sales contract, the seller completed a Real Property Disclosure Statement, as required by statute.

Prior to closing on the sale, the buyer conducted a home inspection, and the home inspection service found animal feces in the attic. In response to this information, the seller hired a contractor to fix this problem. That contractor informed the seller that the animal waste and accompanying staining were repaired. The seller passed this information along to the buyer at closing, and the buyer relied on it, choosing to go through with the purchase of the property.

After closing, the buyer discovered that the animal infestation was extensive and ongoing. At trial, the jury found the seller to be liable for intentional misrepresentation, negligent misrepresentation, and violations of the Maryland Consumer Protection Act (MCPA). The Appellate Court of Maryland affirmed the judgment.

When a Contractor’s Knowledge Creates Seller Liability

This appellate decision clarifies Maryland law by holding that, if a seller’s contractor has knowledge of a condition, that knowledge may be imputed to the seller itself under the law of agency. The court rejected the seller’s argument that the seller did not personally know that animal waste remained in the structure at the time of closing, holding that the knowledge of the seller’s contractor is attributed to the seller.

The remediation contractor here knew that animal waste was still present. Even though the contractor falsely informed the seller that the waste was removed, under principles of agency, the false representation could still be imputed to the seller, because the seller passed along the false information to the buyer. A seller of real property therefore cannot avoid misrepresentation liability by showing that it lacked personal knowledge of the falsity of the statements made to the buyer.

Negligent Misrepresentation and Incomplete Repairs

The court found that, under a theory of negligent misrepresentation, the seller owed a duty to the buyer to ensure that the remediation was successful and complete, once the seller undertook to repair the effects of the infestation. By representing that remediation was complete, when it was not, the seller negligently asserted a false statement, giving rise to liability for negligence.

A distinction is made in the case between a general obligation to investigate property, and a duty arising after a seller undertakes remediation and represents that the work has been completed. Representations that contracted work has been successfully finished can carry legal consequences when the business making the representation has undertaken to address a known condition, and the purchaser can be anticipated to rely on the representation.

Maryland Property Disclosures Do Not Eliminate Misrepresentation Claims

The appellate court also clarified that compliance with Maryland’s property disclosure statement requirements does not preclude common law misrepresentation remedies. The seller’s disclosure statement here represented that the seller was aware of no material defects, including latent defects, affecting the physical condition of the property.

Nevertheless, the buyer was able to pursue intentional and negligent misrepresentation claims based on the seller’s later representations concerning remediation. Compliance with statutory disclosures does not necessarily foreclose liability for false representations made about repair work undertaken after the statutory disclosure process is completed. In addition to common law remedies, the same facts can give rise to liability under the Maryland Consumer Protection Act.