Seller’s Duties Regarding Mold Disclosure in Oregon

Real estate disclosures involve advising parties about any issues with properties that are being sold. The principle of full disclosure allows all of the parties to a transaction to have all of the details they need to:

Evaluate the property;
Make the decision to move forward or reject a sale; and
Complete successful negotiations.

Under federal and state laws, real estate professionals have disclosure duties to their clients as well as to the other party. Although these requirements may vary by state, the seller of the property is required to reveal these disclosures to the buyer.

Examples of required disclosures when selling real estate include, but are not limited to:

• Flood damage;
• Cracks in the foundation;
• Termites; and
• Property line disputes.

A seller is legally obligated to disclose any major defect that they are aware of. Actively concealing a defect is against the law.

If an individual is a seller or a buyer and their agent fails to provide full disclosure, the individual may be able to file a lawsuit against them to recover damages. In addition to disclosure from the seller, a buyer is advised to hire an inspector to conduct an independent evaluation of the property to uncover any defects.

An inspector may find issues that the seller was not aware of or did not disclose. In addition, a buyer has the right to include a clause in their purchase contract that states that the sale of the property is contingent upon the completion of the property inspection and that the inspection must be conducted by a qualified construction expert or engineer at the buyer’s expense.

In addition, an individual should ensure that there are no encumbrances on the property that may prevent a buyer from obtaining legal title to the property or possessing the property. Examples of encumbrances include:

• Easements;
• Encroachments; and
• Other kinds of boundary and title disputes.

The majority of encumbrances will be recorded and may be found at the county recorder’s office. Property may also be sold subject to a mortgage or other type of financial lien.

Because of this, a buyer should determine whether the property has a mortgage or lien by conducting a title search through the county recorder’s office. Title insurance companies can also conduct these searches and provide information regarding any encumbrances on the property.

What Is Required to Disclose in Real Estate in Oregon?

In Oregon, sellers must disclose to buyers any material defects that are not to them that would not be readily apparent to buyers. In addition, civil laws in Oregon impose on the parties to a contract a duty of good faith and fair dealing.

Oregon has a required property disclosure statement that requires individuals answer specific questions regarding the condition of the property that relate to:

• Title to the property and any existing encumbrances, for example, easements and liens;
• Domestic water sources and irrigation;
• Sewage disposal;
• Insulation, including whether insulation is present in the ceiling, walls, and floor;
• The dwelling structure, including whether the roof has any leaks as well as whether any unpermitted additions exist;
• Dwelling systems and fixtures, including the electrical and plumbing components of the house; and
• Common interests, such as homeowners’ association dues and shared common areas.

What Information Must Be Disclosed During a Real Estate Transaction?

When a real estate professional represents a seller, they are required to ask the client for information regarding any known hazards or defects on the property as well as any other factors that may affect the sale. The professional should disclose these defects to the buyer’s representative, who should discuss them with their client in order to determine if they are still interested and wish to negotiate.

Federal laws require sellers to disclose whether houses that were constructed before 1978 have lead-based paint. State laws, however, differ regarding what constitutes mandatory full disclosure.

Material defects that a seller may be required to disclose include:

• Structural defects, such as foundation issues;
• Plumbing problems;
• Presence of mold;
• Termite or pest issues; and
• Whether the residence is located in a flood zone.

In addition, real estate brokers and agents have a fiduciary duty to disclose other information to potential buyers and sellers. This includes information that would influence the sale value, negotiations, as well as the progress of the transaction.

Examples of other issues that may require full disclosure include:

• Offers from other potential buyers;
• Whether either party will move on their sale price or offer, if the client gives the go-ahead;
• The seller’s urgency to sell the property;
• Conflicts of interest; and
• Property value estimate.

What Disclosures Are Required In Oregon? What Are The Seller’s Duties Regarding Mold Disclosure In Oregon?

Oregon law requires that a seller of real property has to disclose the presence of mold to prospective buyers. It also advises homeowners to hire trained professionals to inspect their property.

Although state laws in Oregon do not specifically require seller inspections, contract laws require good faith and fair dealing. This means that, when any material problem could reasonably exist, for example, a mold infestation, there are some circumstances in which a court can hold a seller accountable for failing to conduct an inspection.

If mold is discovered, the laws in Oregon require that it is disclosed on the seller’s property disclosure form. This form must be completed by an individual selling a home during the sale.

This means a seller cannot make this disclosure orally and expect to comply with the law.

What Should I Do if the Seller Did Not Disclose the Presence Of Mold?

If a real estate agent or broker failed to make the required full disclosures, a buyer or seller may have grounds for a lawsuit to recover damages, that may include:

• Economic damages: This may include lost profits or money for repairs;
• Non-economic damages: An example of this would be pain and suffering resulting from the breach of fiduciary duty; or
• Punitive damages: These are provided in cases of especially serious non-disclosures;
  • These damages are meant to punish egregious behavior, such as failure to disclose a known defect which severely affected the buyer’s health.

Steps that a buyer may take in the event of non-disclosure of mold includes:

• Rescinding the purchase of the home;
• Seeking compensatory and incidental damages; or
• Filing a personal injury claim if they were harmed.

How Should Real Estate Disclosures Be Made?

Any disclosure that is made to another party should be in writing. This protects all parties involved if a future dispute arises.

There are many states, including Oregon, that provide a form for these types of disclosures. If this applies, a real estate professional should provide seller clients with any of the standard property disclosure state forms that are available.

It is important to keep in mind that an unknown defect is not subject to full disclosure requirements. This means that the defect was not known to the owner or the real estate professional.

If, however, the seller and the real estate professional fail to perform their due diligence and they miss something they should have reasonably found, it may lead to liability for non-disclosure. It is best practice to disclose any suspected issues as well as to complete an appropriate investigation.

Do I Need a Lawyer for Issues With Mold Disclosure In Oregon?

If you have purchased a house in the State of Oregon and you believe the seller may not have been truthful regarding the presence of mold, it is important to consult with a Oregon real estate lawyer. Your lawyer can advise you of the options for your real estate transaction as well as represent you in court, if needed. If you have any specific questions or concerns, they can address these as well.