The buying and selling of a home or real property often involve snags. Ideally, these can be negotiated or worked out by the two sides with help from real estate agents and attorneys. These can occur as the deal progresses, perhaps after the buyer brings in an inspector to go over the property looking for issues that could adversely impact the property’s value. Even after the inspection, the seller will still include a seller’s property disclosure form provided by the state. If they do not include all known defects to the property, the buyer may file a lawsuit.
The seller must fill out this form in the spirit of full disclosure, addressing all issues or defects to the “best of their knowledge.” The information must reflect the property’s condition. Moreover, the seller’s broker must also impart this information to prospective buyers. However, the seller or their broker is under no obligation to verify the property’s condition with an inspection by an expert before putting it up for sale.
Details to include
These are some examples of property defects:
- Material: This would be details like cracks in the foundation or old wiring that is not up to present-day code.
- Hidden: This includes the property’s potential to flood during heavy rains or other details that are not apparent when inspecting the site.
- Environmental standards: This includes knowledge of toxic substances on the property or in its soil, the presence of radon, asbestos, or other violations of environmental standards.
- Mandatory memberships: The property may be tied to a homeowners’ association or require membership to specific residential or business organizations.
- Special assessments: This could include a pending assessment by an association or municipal authority.
Legal action is possible
Failure to include details or provide misleading information on sellers’ disclosure agreement can put a transaction at risk. It can even make the sale null and void. Depending on the circumstances, legal action can recover the lost value paid once the buyer identifies the defect or misleading information. Those with questions about what to put in the agreement or how to recover damages can often get answers and guidance by speaking with attorneys who handle real estate disputes.