Published on November 18, 2016
If you've ever been involved in a real estate transaction, as a buyer or seller of a home, you already know that there is a long list of laws that need to be followed precisely. Everything needs to adhere to the letter of the law and be in writing – from the purchase contract, to the terms of the loan, to agreements for things like repairs. For the thousands of homes sold around the country, laws represent a major financial risk for all parties involved.
"Homebuyers and sellers should know exactly what needs to be disclosed before a sale."
Anyone selling a home must abide by a few basic rules regarding what they tell buyers about the home. Failure to do so doesn't just make for a dishonest business agreement - it could present serious health and safety risks to a home's new owners. In some cases, home sellers could be responsible for failing to disclose issues that they weren't even aware of, even if they had no malicious intent.
Before you put your home on the market, or if you are starting to look as a buyer, keep in mind what sellers are legally required to disclose.
This is the broadest and most common disclosure. The International Association of Certified Home Inspectors noted that as a rule of thumb, sellers must disclose a repair if they feel they would want to know about it as a buyer. This often covers repairs for damage to the home's essential systems, but could span a wide range of fixes.
The U.S. Environmental Protection Agency banned the use of lead paint in homes in 1978. However, there is still a chance that homes built prior to this date contain some lead paint. The EPA noted that lead paint that remains untouched doesn't pose much health risk, but sellers are still required to acknowledge it. They must also give buyers 10 days to conduct their own testing for lead if they so choose.
Not only is mold a nuisance for its smell, it can be potentially hazardous to one's health. InterNACHI wrote that mold or water intrusion is the most common reason for post-sale lawsuits from new homeowners, since it can be very costly to fix, if not impossible.
According to InterNACHI, a termite infestation is not always obvious, even to the trained eye. Termites can wreak havoc on a home's skeleton without any notice from the outside, until the damage becomes so severe that it threatens structural integrity. Anyone selling a home is required to disclose an infestation or prior treatment for an issue. In some areas where these insects are common, termite damage may not ruin a deal.
An increased risk of natural disaster must be disclosed to buyers. If a home resides in a floodplain or along a fault line or is susceptible to another natural disaster, the buyer needs to know.
This is the least common disclosure sellers are required to make, but it is nonetheless important. A buyer must be told if a home has an infamous past that may make it difficult to be sold or less valuable in the future. This includes homes where serious crimes such as a murder were committed, or homes that gained negative public notoriety for some reason. A more common issue in this category is a home that has been used to manufacture the drug methamphetamine, which can leave lasting, hazardous effects.