When it comes to real estate transactions, there is a lot of negotiations and paperwork involved. There are a number of documents that are important, but one of the most important of these documents is the disclosure report. In real estate law, it is required that the seller of a property provides the disclosure report to the buyer once an offer has been made and received on a piece of property. Keep reading to learn more about disclosures and real estate law so that you can ensure you remain compliant with the law.
What Does a Disclosure Document Consist Of?
The disclosure report should describe the piece of property being sold along with any "material facts" that may potentially affect the property's value. If the seller is aware of an issue with the property, he or she is required by law to disclose the issue. As a general rule, this includes basic features like water systems, electrical systems, and appliances that are used on the property. However, the seller is also required to disclose any environmental or natural hazards that are associated with the property like the presence of a tree that is located close to the home or an increased risk of flooding.
Depending on the state in which you reside, state laws may require that sellers disclose additional facts. Therefore, it is recommended to discuss your individual situation with an attorney and have him or her go over the disclosure document or have him or her draw one up for you to ensure that no essential information is left out of the report.
What Are the Penalties for Failing to Disclose Facts?
As with most things, if you fail to abide by the law, you will face the consequences. With real estate law, both sellers and buyers are protected. If a seller fails to disclose all of the property issues that he or she are aware of, he or she may face monetary fines or be held responsible for the repair costs of the new owner.
On the other hand, a seller is not liable for any issues with the property that he or she is not aware of. It is for this reason that buyers are strongly encouraged to hire a home inspector to perform an inspection on the property prior to moving forward with a sale. A home inspection can reveal any defects that are hidden and prevent a buyer from making an offer on a home that is not worth it.
If you would like to learn more about disclosure reports and real estate law, contact a real estate attorney in your area.