Disclosures in A Residential Real Estate Transaction

Disclosing Defects When Selling a Home

When a person is selling a home, they are generally obligated to disclose any material defects聽or problems in the property. While laws covering full disclosure and what constitutes a 鈥渕aterial defect鈥 may vary from state to state, the seller is typically obliged to inform the buyer of any defects that may cause injury or that would affect the buyer鈥檚 decisions to purchase the home or not.

However, a seller is not required to disclose every single thing that is wrong with the home.聽Minor defects such, as sticky doors or small cracks in the wall need not be disclosed, especially if they are not hidden from the buyer.

What Must Be Listed in a Disclosure Form?

Many states follow the rule of 鈥渃aveat emptor鈥 or 鈥渂uyer beware.鈥澛燭his rule states that the buyer assumes the risk of purchasing a home that contains defects.聽However, in addition to providing information regarding the sale of a home, such as price, age of the home, number of bedrooms or other relevant information, a seller has an affirmative duty to disclose material and dangerous defects. Some of the more major problems that a seller needs to disclose include:

  • Leaks in the ceiling or roof
  • Basement flooding
  • Toxic conditions such as the presence of lead, mold, radon or asbestos
  • Whether the home is exposed to dangerous natural conditions such as a flood zone or an earthquake fault line
  • Faulty electrical wiring
  • The presence of pests such as termites, insects, or rodents
  • Mechanical problems such as heating, air condition, or other problematic appliances
  • Deaths on the premises

In addition to the duty to disclose, a seller may not engage in active concealment of defects in the property.聽For example, they may not paint over faulty wiring in order to conceal the problem from a potential buyer.聽Finally, brand new homes are subject to an implied warranty of fitness, which means that they should be sold in a condition that is generally suitable for habitation.

Who Is Required to Make a Disclosure of Defects in a Real Estate Transaction?

As mentioned, the seller鈥檚 duty to disclose often depends on the seriousness of the defect.聽The seller is basically required to disclose material, substantial defects that would affect the buyer鈥檚 decision to purchase the property.

If a real estate broker or agent are representing the seller, the real estate professional will also have a duty to disclose defects. Real estate agents and brokers are held to higher standards than the average homeowner.聽In most states, if a real estate broker or agent knows of any major defects in the property, they must disclose it to a potential buyer聽even if the seller is not required to do so.

What If I Was Not Informed of a Serious Defect?

In order to protect yourself, you may consider having the home separately appraised and thoroughly examined for defects before purchasing the home.聽If you will have the home inspected, be sure to hire an independent professional who is not working in tandem with the seller or their real estate agent.

If you have purchased a home and then later discovered a major defect, you may be able to recover damages.聽You may be able to bring a claim against the seller, or against a real estate professional who failed to make the disclosure.聽You may be entitled to have the seller or other party pay for repairs of the dangerous condition.

If you have been injured by the dangerous defect, you may be able to recover losses for your injuries.聽Be sure to document any instances of injury using medical records and bills.聽You may also wish to take photographs or video footage of the dangerous condition so that you have a record of the defect before it is repaired.