Does Your House Have Skeletons?
By Teresa Ambord
If you’re selling a house, you probably know that you are supposed to disclose its defects and necessary repair work which could decrease the home’s value. If you fail to do so and a problem arises, you and your real estate agent and broker may all find yourselves in court.
Although you must disclose known problems, like a basement that floods during the rainy season, you don’t have to actively seek to uncover potential problems you aren’t aware of. In other words, you don’t have to hire an inspector to discover unknown defects. But the court will not be amused if it appears you deliberately turned a blind eye to easily discernible problems. For example — don’t try to claim that you didn’t know there was mold growing on the laundry room ceiling because, you say, you weren’t in the habit of looking up. On the other hand, suppose months after the sell, the buyer discovers there is a hairline crack inside the top of the chimney wall. Assuming you really weren’t aware of it, it seems unreasonable for the buyer to claim you should’ve known about the crack.
A Disclosure Rule of Thumb
A good rule from real estate professionals is this: if you think something needs to be disclosed, disclose it. If you think something doesn’t need to be disclosed, disclose it. If it really is no big deal, an intelligent buyer will not care. If it turns out to be a big deal, you’re covered. You can also ask your agent, but ultimately the best plan might be to ask yourself this: if you were the buyer, would it matter to you?
Lead-based Paint
If your house was built before 1978, you are subject to a federal law known as Title X, dealing with lead-based paint. If your house falls in this category, you must inform potential buyers of the possibility of a lead-based paint hazard in the home. You can get more information about what you need to do by logging onto the EPA Web site here:
Skeleton in your closet?
You also need to disclose when a death has occurred on the property within the last three years. If you know of a death there more than three years ago and the buyer asks, you must disclose that information too. Failure to do so can result in a lawsuit and a rescinded sale. Many people feel that a death or a notorious event (such as a home that is the scene of a hostage situation) will have such a psychological impact on them that they cannot live there.
As you might expect, houses where murders took place are likely to lose some appraised value. This was true for the home where JonBenet Ramsey was killed, and for Nicole Brown Simpson’s condo. Oddly enough the Scott and Laci Peterson home did not lose value since there was no proof that the murders occurred within the home.
If there is an AIDS related death in a home, you are not required to disclose that information, no matter how recent the death occurred.
How Do You Disclose?
Most states have forms which your real estate agent should provide. The agent or broker can tell you what disclosure laws apply in your state as well as what local ordinances. The forms are to be filled out by you and signed and dated. Even if your state doesn’t require such a form, it is a good way to protect yourself, and your broker may require it. You should get the buyer to sign and date a copy of the disclosure, acknowledging that they received it.
Protect Yourself
Many sellers do hire inspectors. Here’s why: the inspector’s report provides you with a list of things that need fixing before you put the house on the market. It’s also a cheap way to protect yourself from charges of nondisclosure if you can provide an inspector’s report and evidence that you fixed any problems found. And, it can be a bargaining chip if you can present a potential buyer with proof of the home’s condition.
