New Post has been published on Orange County Real Estate Blog
New Post has been published on http://go2wendy.com/search-properties/real-estate/sellers-property-disclosure-requirements/
Seller's Property Disclosure Requirements
Although state and federal laws regulate residential real estate practices in order to protect all the parties involved in a transaction, the buyers are the primary beneficiaries of the legislation. For example, prior to the implementation of disclosure laws, it was the responsibility of a prospective purchaser to uncover any defects in a residential property. While this “buyers beware” approach is still true for commercial transactions, it no longer applies to residential sales. Requirements vary among states, but sellers and listing agents may be guilty of fraud if they try to hide facts or issues that adversely affect the value of a property. In fact, failure to disclose is the most common basis for lawsuits against real estate agents.
State law determines if the property disclosures must be in writing, but smart real estate agents insist on having a printed copy in order to protect themselves. At least that way, they have some basis for denying knowledge of any problems that appear after the closing.
The laws apply to latent defects that aren’t immediately visible when an individual walks through a home. Roofing, plumbing, electrical and foundation problems are some of the most likely candidates for a cover-up because they can be expensive to fix. Once the owner or agent is aware of such a defect, it must be disclosed to a pending buyer. If a home inspection uncovers serious problems that cause one buyer to cancel a contract, the owner has to fix those problems or disclose them to future buyers. The disclosure laws apply even when an as-is purchase contract is used.
Besides the physical condition of the property, the seller may be required to disclose the presence of any liens on the property and any assessments that may be coming due after the change in ownership. Some states require the disclosure of any recent murders or suicides on the property and unusual levels of neighborhood noise or unpleasant odors. Orange County California sellers must disclose if their property is located in a designated flood, fire or earthquake zone.
The penalties for disclosure failures and the allowable time in which to file a lawsuit differ among states. Minimally, the seller may be required to pay three times the cost of repairs. If the jury determines that fraud is involved, the guilty parties may end up serving time in jail.
If you have any questions regarding the need to disclose, consult a Orange County real estate attorney. Otherwise, the best policy is to err on the side of disclosing too much rather than not enough.
