What types of things must I disclose whenever I’m selling my home? Well this emanates from a case that’s probably twenty-five-years-old called Johnson versus Davis. The Supreme Court came down on selling your home, or your residential property, that says that a seller must disclose to a buyer any matters that may materially affect the value of the property that are not readily observable. This provision has also been carried over into the present contract that has been approved by The Board of Realtors in the Florida Bar. It provides precisely what I have said.
What falls into that category? Well certainly if you have a leaky roof, you can’t very well not tell them about it. If you have a fire or a flood and then you’ve taken care of it, you need to disclose that the property has previously flooded. Things such as that. It gets into a more grey area whenever, let’s say, that someone has died in the home. Certainly if it’s coming out of an estate, well that’s fairly apparent. I don’t know that that’s a matter that may materially affect the value of a property.
Well take it one step further. What happens if someone was murdered in the home, or some crime was committed, or is was a grow house? Well those matters maybe something that could materially affect the value of a property. Another matter is what if you know that your neighbor had sinkhole? Now are you required to disclose that your neighbor had a sinkhole on his property although you haven’t experienced any sinkholes? There’s any number of grey areas that come into being or of what you need to disclose.
The realtors have a fairly comprehensive sheet that they go through for each component of your home, such as the plumbing, the electrical, all of the disclosure sheet, and so that should be a pretty good guide as far as completing that as to whenever you sell your home. Go through that disclosure to let them know how long it’s been since you’ve redone the roof, whether you’ve experienced leaks, things such as that.
The best thing to do however, if you’re going to buy a home, is to have your own inspection done. But that’s not the question you wanted to know. From a seller’s perspective, what you needed to disclose. I always recommend the sellers to air on the side of more disclosure rather than less so that you don’t have to worry about it coming back to haunt you later on. When in doubt, I’d go ahead and disclose the matter to the buyer. If they like your home, and it’s in good shape, and there’s no really other problems, it’s not going to keep them from buying the house. If they wind up buying the house and later on have seller’s remorse, or some other reason that they wanted to get out of the house, or bring a lawsuit against you, that you’ve made the disclosure and you’ve taken away that reason for them to try and come after you for failure to disclose.
The buyer’s remedies for a seller failure to disclose is if they can bring an action within one year it’s called “rescission,” which means that you turn around and you offer to convey the property back to the seller, and in turn you receive your money. This is a difficult remedy; sometimes you’ve paid off mortgages, that the seller doesn’t have the money, that you have a mortgage that you have to pay off, or you’ve made substantial improvements, so there’s any number of problems.
The other aspect of it, if that remedy is not feasible, is to sue for whatever the cost to repair is or to correct the problem. That is your other remedy. Of course, before you have a good lawsuit with that, you need to make sure that whoever you’re suing has the money to pay. That’s another aspect of looking at it. This obligation to disclose not only extends to a seller, but also to realtors that if they know of any information they must disclose it to the buyer or make the disclosure.
There is another problem as far as buyers are concerned if they wish to bring an action against the seller: they have show they the seller knew of the problem. Many times you see whenever you’re buying bank-owned property, there’s a big disclosure saying they’ve never occupied the property and therefore do not know if there are any problems with it. That’s a discussion as far was what needs to be disclosed, and certainly a grey area.
If you have any questions, well give me a call at 727-847-2288.