5 important tips for completing a property disclosure
I am representing buyers in the purchase of a home and the contract is signed and everyone is ready to go. We just received the Seller’s property disclosure and now things are suddenly up in the air. What happened? The seller did not take the time to carefully read and consider the property disclosure and now the sale may be in jeopardy. This is an unnecessary obstacle that can be easily avoided.
No seller is required to provide a property disclosure but every seller IS required to disclose any ‘material defects’ of which they are aware and failure to disclose a known material defect may result in legal liability. What is a material defect? The legal definition of a material defect is as follows:
According to 15 USCS § 6602 (4), [Title 15. Commerce and Trade; Chapter 92. Year 2000 Computer Date Change] the term material defect means “a defect in any item, whether tangible or intangible, or in the provision of a service, that substantially prevents the item or service from operating or functioning as designed or according to its specifications.
Basically, if the seller knows something is not working properly or is not performing it’s intended function, they MUST disclose this issue. For example: a roof that is leaking (not providing it’s intended function; a sewer line that is backed up; a furnace that is not working properly or the presence of potentially troublesome materials such as aluminum wiring. The seller’s property disclosure is a relatively simple way to ensure any material defects are disclosed.
So what can seller’s do to ensure the process of selling the home can move forward smoothly?:
- Carefully consider each item on the disclosure and complete the form as clearly and concisely as possible. If you know something is wrong, disclose it. If everything is working fine then say it is. If you honestly “do not know” then say so.
- Don’t simply go through the entire document and say ‘Do Not Know’. Even if you’re a landlord and have not lived in the home for a number of years it is highly unlikely that you do not know whether the dishwasher is working or not. As a buyer I would find it hard to believe that your renter didn’t notify you and it puts the negotiations in jeopardy.
- Give details whenever possible. If the roof is ‘new’ say when it was installed. Give any other information you can relating to permits, warranties or other items.
- Do not leave items blank. Fill in every item. When things are left blank it creates questions about why that item was skipped. Carefully review the document before signing.
- The seller is the only one who can complete the disclosure. Your real estate broker should have enough experience to give you guidance as you go through the document and answer any questions and you should rely on their expertise, but in the end you are the one responsible.
Here is a link to a copy of the Colorado Real Estate Commissions “Seller’s Property Disclosure”.
If you live in the Metro Denver area and are considering buying or selling a home, please give me a call. I have more than 10 years of comprehensive experience as an inspector, teacher, landlord, homeowner, student and handywoman. I have inspected over 350 homes, taught more than 500 homeowners, owned and managed investment properties and have volunteered for 11 years building homes with Habitat for Humanity. My range of knowledge and experience will insure your home sells quickly, easily and with no surprises.