Q: New homes in some District locations sell so quickly these days that buyers frequently have to sign a contract guided only by a sales brochure. Waiting to see a model house is impossible because there would be nothing left to buy.
To what extent are builders obligated to deliver what is spelled out in these brochures? To cite three typical features, could a fireplace, washer and dryer or dark oak floors not be included if they were clearly indicated in the sales brochure as standard feature?
There is, as usual, no mention of any structural, design or equipment details in the contract. If one or more of these items were not included in the delivered homes, what action could an owner take?
A: It always amazes me that people sign contracts without having the slightest idea of what property will be sold, and what features and equipment go with the property.
Your question need not to be limited to newly constructed homes. If you will look at the standard District of Columbia sales contract, you will note that the only reference to the house is the legal description and the street address. At least, the Maryland standard form contract gives some description of the improvements to the property, including wall-to-wall carpeting, storm windows, built-in kitchen equipment, etc.
You have raised a most interesting - and legally troublesome - question. First, we should point out that the vast majority of builders are honest, and will follow through on their promises, even though those promises are not written into the sales contract.
Unfortunately, there are a few "bad apples" among builders (as there are among lawyers, doctors and other professionals), and that is where we get the problems. Additionally, real estate brokers who are not fully conversant with the developer or the property often make representations that cannot be fulfilled.
In law, we refer to these as "puffing." Some element of puffing is legally permissible. However, under no circumstances, will the law permit false statements where the person making those statements knows them to be untrue.
Look at the standard form sales contract. Invariably, there will be language near the end of the form which states:
"This contract contains the final and entire agreement between the parties hereto, and they shall not be bound by any terms, conditions, statements warranties, or representations, oral or written not contained herein or is signed, attached addenda."
Thus, legally speaking, even though the sales brochure talks about those dark oak floors, a strick, literal reading of the contract could mean that the builder need not furnish those types of floors.
Needless to say, this is a harsh remedy, in keeping with the ancient doctrine of caveat emptor - let the buyer beware. While this doctrine has become a relic of the past in other comsumer areas, the housing arena still remains the last bustion for this doctrine.
There is hope, however. If you relied on the sales brochure when you entered into the sales contract, you could rescind the contract on the grounds of fraud, or misrepresentation. Recision means that you would be relieved of your legal obligation to purchase the property, and you would be put financially back in the same position as before the contract was signed.
But recession will require court action, which is time consuming, expensive and not always successful.
All too often, we ignore preventive law. But here is one way of resolving your problem, if you have not already signed a sales contract. If there is a sales brochure, make that part of the sales contract. The language to insert at the end of the contract is:
"The sales brochure identified as , and marked Exhibit A, is attached hereto and incorporated herein by reference."
In simple English, this means that the warranties and representations of the builder are made a part of the contract. You can rely on them, and need not go to settlement if the prominent items in the sales brochure do not find their way into the completed house.
Benny L. Kass is a Washington attorney. Write to him in care of the Real Estate Section.