What Are Home Sellers Required to Disclose?

Selling a home is mostly viewed as a financial transaction, but it’s a legal one as well. Because sellers want the transaction to be finished on closing day, with no further entanglements, it is critical to disclose all known facts about the property during the sale process. Otherwise, it is possible to end up in court, defending oneself against allegations of concealing important information. The law requires most types of information to be disclosed, with many facts falling under the following categories. The legal standard is anything that might affect the value and desirability of the property.

Lead paint. According to federal law, both seller and buyer must sign a lead paint disclosure if the home was built before 1978. This rule applies in California, whether or not the seller believes there is lead paint in the house. On the other hand, if the structure was built after 1978 and the seller is not aware of whether lead paint was ever used within it, you are not required to investigate the issue any further.

Pests. In most cases, the seller is required to notify the buyer of any ongoing infestation within the home. Of course, this information is often uncovered during a home inspection .

Death on the property. If there was a death on the property within the past three (3) years, the seller must disclose this. The seller does not need to disclose the manner in which the death occurred. If the buyer specifically asks about deaths within the home, the seller must supply the history even if the incident occurred more than three years ago. This is particularly important if the death was the result of a murder or other criminal activity which would have been publicized in the news

Drainage problems. Ironically, water can be one of the most destructive forces on earth. If the house routinely floods, nearby development has led to standing water in the yard, or the home has any other issues with drainage, it is best for the seller to disclose it. These issues can come and go, tempting many sellers to “omit” the information during the sale. But if a buyer can prove that the seller was aware of the problem and failed to disclose it, the seller can be found liable for damages.

Boundary disputes. It might seem like a small issue, but even a “friendly” boundary dispute with a neighbor can turn sour over time, and these often become extremely expensive to resolve. Even if the dispute is minor, sellers should always disclose such disputes to buyers, just if legal problems arise later.

Hauntings. This sounds absolutely silly to most people, but courts have actually dealt with cases involving “haunted houses.” If the seller suspects paranormal activity within the home, disclosing it is still the safest way to go. Luckily, many buyers aren’t bothered by such information.

Disclosures. The Real Estate Transfer Disclosure Statement and the Seller Property Questionnaire are the best documents for the seller to use when making disclosures. There are many items on these documents which will trigger your memory as a seller. The point is to include as much as possible in the disclosures.

With regard to disclosing facts about a property, it’s usually better to be safe than sorry. You really can never over-disclose. A buyer is more likely to accept defects in the property during escrow and close the transaction. Once the transaction is closed, a buyer will not be as forgiving. If you have to ask yourself if you should disclose or not, that means you should disclose! To learn more about which information you must disclose to a buyer, call our real estate attorneys. We can guide you through this process.

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