When shopping for a home, there are many things to look for. Finding a backyard perfect for busy little explorers, or a finished basement for a tricked-out media room, can feel like striking gold. Other finds are not so lucky – structural issues, plumbing problems or even (shudder) an infestation. Wouldn’t it be better to find those things before forking over the down payment? To help out in that regard, there are laws in place to protect the buyer from unknowingly purchasing a home with major faults.
Disclosing known issues with a property protects the seller from future lawsuits and the buyer from future headaches. Regulations vary by location, but here are some common real estate notification and disclosure rules sellers should consider, and buyers should know to ask about.
Disclosures Concerning the Physical Structure
These are some common disclosures that apply to the physical structure of the home:
- Water leakage: window, roof, basement, etc.
- Foundation defects
- Plumbing problems
- Electrical issues
- Roof defects
- Heating/cooling system/major appliance issues
- Radon gas
Here are some other disclosures you might not have thought about:
This is actually a federal requirement. For every home built prior to 1978, the seller (and/or real estate agent) is required to disclose the presence of any lead-based paint or known hazards from lead-based paint. Language about the disclosure and notification of hazards must be included in every sales contract regardless of the presence of any hazards.
Any existing reports written about the property must be provided to the buyer. The seller must also give the buyer the “Protect Your Family from Lead in Your Home” pamphlet. In addition, home buyers are entitled to a 10-day period during which they can conduct (and foot the bill for) a lead-based paint inspection and risk assessment.
Renovations and Upgrades
Any work that’s been done to improve or repair the property should be disclosed. It’s especially important if the work was completed without the appropriate permits. If the work was done improperly, it could create a health and safety issue, which the seller could be on the hook for up to 10 years following the sale. It’s a good idea for the home buyer to check the city’s building permit report against the seller’s disclosure.
There are also some less obvious disclosures, which can vary widely by location:
- Problems with the neighbors
- Barking dogs
- Title issues
- Outstanding liens
- Violent crimes that occurred on the property
- Drainage issues
- Natural hazards such as earthquakes, floods and fires
- Pollution: noise, air, ground, etc.
- Construction projects in the area
- Zoning changes
Some disclosures lean toward creepy, but they’re definitely nice to know:
Registered Offenders Database
Sellers in California must notify potential buyers of the availability of a law enforcement database showing the location of registered sex offenders.
Death on the Property
A death on the property must be disclosed if it occurred within the three years prior to the purchase offer date. Buyers may shy away from a home with a sad or tragic history and may even be wary of a haunting. Check out this story about the sale of a rumored haunted house.
How to Deal with a Lack of Disclosure
If you’ve already bought your home and think you may have been duped by the seller’s lack of disclosure, you have some ability to work things out. You may well be able to come to an agreement with the responsible party to resolve the issue. If not, you may have a good case for a lawsuit. Learn more about this on Nolo.com.
Buying a home is a big commitment of money, time and emotion. It’s important to do your homework (pun not intended) before signing on the dotted line. Knowing what questions to ask about seller disclosures gives you control in the purchase process and will ultimately save you stress and money.
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