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Disclosing Defects When Selling a Home | LegalMatch Law Library

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What are Disclosures in Real Estate?

Any time an owner sells his home, he is required by law to disclose any material defects or problems with the property. What constitutes a “material defect” can vary from state to state, but generally, a material defect is any fact that may have significant and reasonable impact on the market value of the property.

It can also be any condition that poses an unreasonable risk to people. Examples of material defects can include faulty stairs, compromised foundations, and leaky roofs, to name a few.

What are You Required Disclosures?

Property owners are required to disclose only information within your personal knowledge. In that regard, sellers are not required to hire inspectors to discover problems that owners did not know existed.

However, if a seller hires an inspector who discovers numerous defects, the seller is required to disclose those defects to potential buyers. Because a seller’s agent is the representative of the seller, the agent is also required to disclose these defects.

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What are Common Examples of Disclosures?

Sellers must disclose material and dangerous defects that impact the fair market value of the property. Below is a non-exhaustive list of examples that sellers must disclose when selling their property.

  • Leaky roof or ceiling;
  • Flooding in the basement;
  • Toxic conditions known to the seller such as asbestos ceilings, mold, lead paint, etc.;
  • Whether the home is exposed to natural hazardous conditions such as a flood zone, earthquake fault line, or even within the path of air flight;
  • Deaths on the property, typically within the last 3 years (although the law may vary depending on the state where you reside);
  • Faulty electrical wiring;
  • The known presence of pests such as termites, insects, or rodents;
  • Mechanical problems such as heating, air condition, non-functioning appliances, etc.;
  • Compromised foundations; and
  • Noisy, disruptive neighbors.

Can the Seller or Seller’s Agent Conceal Defects?

No. Not only does a seller have a duty to disclose any known material defects, but he also cannot actively conceal known defects on the property. For instance, let’s say that there is a huge crack in the concrete foundation that is visible only upon inspection through a home’s crawl space.

A buyer wants to inspect the crawl space, but the seller’s agent denies the buyer access, claiming, “The crawl space is locked and inaccessible, but the foundation is fine,” even though the agent knows that the foundation is compromised. In this instance, the buyer may have a legal claim against the seller and/or real estate agent.

How Can Sellers Avoid Liability?

As a seller, the best way to avoid liability is to err on the side of disclosing. If you don’t know whether something is a required disclosure, avoid liability by telling all. You may also want to consider hiring a licensed professional to conduct an inspection and disclosing the results to all potential buyers.

The results will typically be codified in an inspection report, which should be disseminated to all buyers interested in the property.

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What Causes of Action Do I Have Against a Seller?

As a buyer, if you purchase a home and later discover a major defect, you may be able to sue the seller, seller’s agent, and perhaps others for negligence, fraud, misrepresentation, among other causes of action.

If you are successful to demonstrate your claim, you can recover damages. You also may be entitled to have the seller or other party pay for repairs of the dangerous condition.

Should I Hire a Lawyer?

If you have been injured by a defect that was not disclosed to you, you may have a viable claim in a court of law. A local real estate lawyer can help represent your interests so that you can recover your losses. If you have not yet purchased a home but are considering to do so, a real estate attorney can provide helpful advice to ensure your interests are protected.

Photo of page author Erin Chan Adams

, LegalMatch Legal Writer

Last Modified: 05-18-2018 01:16 PM PDT

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