It is not unreasonable for home buyers to seek assurances about the homes they purchase. One method for obtaining a sense of confidence about the home is having a home inspection. Sometimes it is not as much as wanting to know what needs to be fixed as much as wanting to know what they were getting into, as one of my clients casually stated. However, home inspectors are not perfect and there are numerous conditions in the home that could go undetected. The home seller golden rule is disclose-disclose-disclose.
In the past, it used to be buyer beware. Unscrupulous home sellers racked up complaints. Consumer advocates pushed some legislatures to enact a property disclosure law. Property disclosure laws have been enacted in about thirty states. Here in Maryland, the law has been was around since 1994.
It had been incorrectly thought by home sellers (and some real estate agents), that if the disclaimer is given, the homeowner did not have to provide any information at all about the home- including relevant material facts and latent defects. In fact, some home sellers would wrongly choose the disclaimer statement to not reveal material facts or latent defects.
The disclosure addenda are constantly changing. A significant change at the time of this writing to the required Maryland disclosure still requires the homeowner to provide either the disclosure statement or disclaimer. Except the added burden of disclosing known latent defects is also required, even if you disclaim.
If you are selling your home or thinking of selling your home in the future, you should discuss with your Realtor the Maryland disclosure/disclaimer statement and recent changes to the disclosure laws. If you have any doubt about your obligations as a home seller or do not understand the disclosure law, you should consider consulting an attorney.
The golden rule of disclosure is to disclose. An issue that is disclosed to a home buyer before they enter into a contract with you is a piece of information that the home buyer will keep in mind as they purchase the home. However, undisclosed issues can come back to bite you, even after the sale.
by Dan Krell © 2005