The 411 of Disclosures
When selling a home, there are rules you must follow. If your house has mold, termites or there’s some old heating tank buried in the basement, and you know about it, you can’t pretend those problems don’t exist. Disclosure laws are in place, and require someone to disclose this important information before a sales contract can be signed.
While the disclosure laws differ from state to state, it’s pretty universal that fraudulently concealing any major problems is a no-no. That means if your foundation is crumbling or your basement floods every time it rains, you’ll most likely have to say something.
Some states don’t have a standard disclosure document but instead employ the “Caveat Emptor” or “Buyer Beware” rule, stating it’s the responsibility of the buyer to ascertain if there are any issues with the home.
Property disclosure plays a vital role in a real estate deal. Today, it is almost standard for written disclosures to be included in the contract, so when you sign one, be truthful. If not, you’re looking at costly fees and possibly a major lawsuit.
The first step is to confer with your real estate agent and/or attorney about what’s required to disclose. You can also check with your town’s city planning department about local ordinances and disclosures that can come into play.
Generally, you are only responsible for disclosing information that you personally know about. So, if there’s a condition you didn’t know about, and weren’t told about when you previously bought the house, it’s not necessary to hire an inspector to come look for things.
However, some states do require more investigation on your part. There are laws that require a homeowner to search for some of these major problems (especially mold and lead paint) whether you see problems or not.
If you’re in the market for a new home, you should always demand that a disclosure statement be included a part of the contract. This will protect you in the event something does pop up once you move in. While you can’t force someone to sign this, a simple threat that you’ll walk away will, more often than not, force a buyer’s hand.
If people do refuse, and you still want the house, it should send up a red flag that something might be wrong, and you should invest a little more in inspections and do your due diligence about the neighborhood. Better to be safe than sorry and make sure the home of your dreams doesn’t turn into a nightmare.
