Disclose

By Bruce Mulhearn

From “HomeBuyer” – November 3, 2001

Disclose, disclose, disclose is the key word when it comes to a seller’s responsibility today. The trend in real estate law today continually calls for more disclosure rather than utilizing the old standard of “caveat emptor” or let the buyer beware.

Without exception, California law requires that a seller disclose to a buyer all known material facts that are not readily apparent to a buyer. A material fact is a condition or situation that would affect a decision to purchase or what price will be paid for the property.

Obviously, if a roof leaks when it rains and a seller has repaired the interior water damage but done nothing about repair of the roof, that’s a material fact. A prospective buyer must know about the leak so they can decide if they wish to make a repair, reduce the offer price, or move on to a different property.

Sellers that intentionally fail to disclose material facts are only fooling themselves in that the problem will be discovered, and when that occurs, the first person contacted by the purchasers is the attorney. Some sellers believe disclosure of a condition will impede the sale of their property where in fact that is seldom the result, as buyers believe they know the true history of the property prior to their signing of the purchase contract.

Confusion abounds about what must be disclosed since what is important to one person may be meaningless to another. Generally, if you ask yourself if something should be disclosed, that’s enough reason to do so. It’s best to be on the safe side and let the buyer make the decision. Another test is if it would be an important fact for you to consider should you be purchasing the home. If the answer is yes, it’s best to disclose it.

In California, the property transfer disclosure form covers the most readily apparent difficulties, and it must be signed by all parties to the transaction – seller, buyer, and agents. Buyers and sellers alike should take special care when reviewing and signing this document, as it’s important relative to future rights in court, relative to the condition of the property at the time of sale.

Buyers should also obtain a professional home inspection prior to closing. The transfer disclosure statement should be provided to the inspector for review so that he may validate all the conditions made by the seller. It’s much easier to correct deficiencies or defects prior to closing rather than after. Sellers should recognize that written disclosure statements are their strongest protection against future litigation from the buyer since it can always be said not only did we tell you of the problem, but we put the notice in writing. A final word would be to ask that your agent review the written disclosure form prior to giving it to anyone else.