A seller’s disclosure brings transparency to a real estate transaction and can protect both buyers and sellers. In the disclosure, a seller provides written information about known issues that could hurt the property’s value, such as termite damage, improper drainage or a leaky roof, as well as details like homeowners association fees and restrictions. Proper disclosure means the buyer gets a more comprehensive view of the property, and the seller lessens their chance of getting sued by the new owner for hiding information. Here are 6 things home sellers are legally required to disclose.
6 things home sellers are legally required to disclose
1. Emotional defects
Depending on your location, you may be required to disclose what are called ’emotional defects’ about a home. This is particularly true if a murder, suicide, or violent crime occurred there. Some buyers have concerns or superstitions about purchasing a home in which someone has died. Therefore, disclosure might be required.
2. Property defects
Even though many buyers organise a building inspection before putting in an offer, you’re legally obligated to disclose any defects such as structural problems, dampness, insect infestation or fixtures and appliances that don’t work. So ideally, it would work in your favour to clear these problems up before you put your house on the market.
3. Neighbour disputes or boundary issues
It might not seem like a big deal that your fence is a few centimetres inside your neighbour’s property line, but it can affect a new owner down the road. What may seem like a small neighbourly dispute could actually become a major one when homes change hands, so it’s wise to disclose it upfront. Moreover, it may be legally required to disclose neighbourhood nuisances. A nuisance is often a noise or odour from a source outside the property that could irritate the property’s occupants.
4. Repairs
What have you repaired, and why? Buyers need to know the home’s repair history so they can have their own home inspectors pay extra attention to problem areas and so that they’re aware of probable future issues. You may also want to disclose electrical or plumbing repairs and any other problems that you would want to know about if you were going to buy the home and live in it.
5. Defects in property title
The legislation can vary from one area to another, but generally, title defects include:
- Easements, a section of land registered on your property title, which gives someone the right to use the land for a specific purpose (such as a shared driveway), even though they’re not the landowner.
- Covenants that may affect the use and value of your land.
- Leases where the property remains under an agreement for a continuous period after settlement.
- Zoning, legislation that regulates how the property can be used and designates the type of operations allowed on site.
6. Pests
Does the property have a snake, mice, or bat infestation? In most areas, sellers are required by law to disclose any sort of pest infestation or issues. If you want to avoid trouble down the track, it pays to be honest. You can choose to fix problems before your property goes on the market. Alternatively, you can be honest to buyers and let them factor any required works into their costs.
