Under state and federal laws, realtors and real estate brokers must disclose certain information to buyers and sellers. Full disclosure provides parties with the information needed to properly negotiate price and assess the property’s suitability for their needs. Your agent should disclose all identified hazards on a property—as well as other factors that may impact the property’s price.
In real estate transactions, full disclosure typically means that the seller must disclose any property defects and any other important information that could have an effect on a party's decision to enter into the deal.
Under federal law, you must disclose the presence of lead-based paint if your house was built before 1978. Additional state disclosure laws vary dramatically. Depending on where you live, you may have to disclose material defects involving:
Sellers and real estate agents must disclose known defects and hazards. (You do not have to search for unknown defects.) However, it is always in your best interest to disclose all known and suspected hazards. Failure to disclose can result in a failed sales transaction and litigation.
Typically, disclosures must be in writing. Most states have a standard form that you must complete and provide to any prospective buyers. Your real estate broker should provide you with a property disclosure form and may assist in its completion.
In addition to disclosing known and suspected hazards, a real estate broker has a fiduciary duty to disclose other information that would impact the value of a sale. This includes:
Both the seller and the real estate brokers have duties to disclose. If information is withheld, the buyer or seller may be entitled to damages. In a lawsuit, you may recover:
If you believe that you suffered losses due to a real estate agent’s actions, keep all records and documents relating to your dealings with the agent. Be sure to gather important data such as any prices that were presented to you, dates of offers, acceptances of offers, written reports that have suspicious or questionable figures, disclosure statements, and home inspections.
When working with a real estate broker or agent, you should double-check the information that they provide to you. You may wish to hire a property appraiser for a second opinion, or speak with a real estate lawyer regarding your rights as a buyer or as a seller. A real estate lawyer can help protect your interests by confirming that all information has been properly disclosed to you. Also, if you need a draft of a full disclosure agreement, an attorney can create one that is specific to your circumstances.
Last Modified: 07-10-2017 11:47 AM PDTLaw Library Disclaimer
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