If you plan to buy a home in North Carolina, you should know it is a caveat emptor state. 

The buyer is responsible for inspecting the property and discovering defects before purchasing. The seller is not obligated to disclose any problems with the property unless they are asked by the buyer or required by law. 

Caveat emptor is a Latin phrase that means "let the buyer beware." It is a common law doctrine that burdens buyers to protect themselves from fraud or misrepresentation by sellers.

Caveat emptor is still followed in some states, but others have shifted to a more buyer-friendly approach, where sellers must disclose all known material defects with the property. 

North Carolina is one of the states that lean toward caveat emptor, along with Alabama, Arkansas, Georgia, North Dakota, Virginia, and Wyoming. Buyers must be extra careful and diligent when buying a home in North Carolina. They should hire a professional home inspector, ask the seller specific questions about the property's condition and history, and review all documents related to the property carefully. 

State law requires sellers of one- to four-unit residential properties to complete and give buyers two disclosure forms: the Residential Property and Owners' Association Statement (RPOADS) and the Mineral and Oil and Gas Rights Mandatory Disclosure Statement (MOG). For each item on the RPOADS, sellers may answer "yes," "no," or "no representation."

If they find out after closing that the property has serious issues that the seller did not disclose, they may have a hard time suing the seller for damages unless they can prove fraud or concealment by the seller.

Suppose a property is bought in "as-is" condition in a caveat emptor state like North Carolina. In that case, those buyers will almost certainly lose any lawsuits claiming the transaction was fraudulent.

J. Le Hardy

Real estate consultant

HIVE MIND REALTY

Carrboro/Chapel Hill, NC

Published 2023 05-20