For Part 1 on what you should do before closing, click here.
Once the papers are signed and the keys are handed over, most sellers assume their job is finished. But sometimes, the problems don’t end at the closing table. A few weeks or even months later, you might get a call or a letter from the buyer claiming there’s a serious issue with the property.
In some cases, it’s something obvious like water in the basement or a crack in the foundation. Other times, it’s something hidden behind a wall or under insulation that nobody caught. Either way, you could be accused of hiding a defect even if you didn’t know it existed. These situations are stressful, and depending on how they’re handled, they can either be resolved quickly or turn into a full-blown lawsuit.
What Buyers Might Do (And What That Means for You)
Once a buyer finds a serious issue, their first move may be to send a demand letter asking you to pay for repairs. Sometimes they include contractor estimates to back up their request. Other times, they go straight to legal action.
In Illinois, the Real Property Disclosure Act is often the buyer’s first tool. It says you’re required to disclose known material defects. If they believe you knew about a problem and didn’t say anything, they might claim you violated that law. Indiana has a similar disclosure requirement. But here’s the catch: the burden is on the buyer to prove you knew about the defect and failed to disclose it.
That’s not always easy to prove. But it’s not impossible either, especially if there’s evidence the problem existed during your ownership. For example, if a foundation crack was recently patched, a contractor might be able to say the damage had been there for years. An electrician might find old wiring that should have been obvious. The buyer may then argue, “You lived there for 20 years, how could you not have known?”
This is where things get tricky. If there’s no proof you had knowledge of the defect, a court is unlikely to hold you responsible. But if there’s a clear paper trail or worse, proof you lied on the disclosure, it could turn into a case against you.
What Sellers Can Do When Accusations Come Up
First, don’t panic. Just because a buyer makes a demand doesn’t mean they’re right or that you’re legally responsible. It’s okay to respond, but don’t admit fault or agree to anything without legal advice.
If the buyer includes repair estimates, review them carefully. Are they reasonable? Do they match what was disclosed or inspected before closing? Sometimes issues come up that are genuinely new and not your responsibility. Other times, they were missed by the buyer’s inspector. That’s not your fault either.
If a claim turns into a lawsuit, you’ll need more than just your memory to defend yourself. This is where documentation matters. Keep copies of your disclosure form, inspection reports, repair records, and communication with contractors. If you disclosed an issue or had it fixed properly, that can work in your favor.
Buyers may also file an insurance claim, but most homeowner’s insurance policies don’t cover undisclosed damage that existed before the policy began. Title insurance also won’t help unless the problem relates to title-related issues or liens. That’s why, in the end, the seller often becomes the target.
While no seller wants to be in this position, remember: not all claims hold up. The buyer must prove that you knew about the issue and failed to disclose it. If you were honest, didn’t try to cover anything up, and made a good faith effort to disclose what you knew, you’re in a strong position.
Sold Your Home? Still Have Questions?
Problems after closing can be frustrating, especially when you thought the sale was behind you. If a buyer is making demands or threatening legal action, Auricchio Law Offices can help you understand your rights and defend your position. Whether it’s responding to a demand letter or fighting a false claim, we’re here to make sure the story doesn’t end with a surprise twist. Reach out to us today.
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