Disclosure Requirements

Most people think it is reasonable to expect a seller to be honest in disclosing what they know about the property they are selling, but some people have things to hide, and usually try to do that by stating to the new buyer that they are selling the property “as is.” Thankfully, laws governing real estate transactions have evolved from the archaic mind-set that made the “buyer beware.” Buyers should still investigate and double check the statements of a seller for errors and omissions as if that discovery process was all their responsibility, even though there is now a statutory burden on sellers to provide a fully completed Seller Disclosure Statement when they sell. This disclosure must be in the precise format decided by the legislature, not just some random notes from the seller.

An exception to that disclosure requirement is that dead people don’t have to disclose! In other words, the only exception is the personal representative or executor of an estate. Some people have interpreted this to mean that because they came into title of a property that was part of an estate, after the death of a relative, they have no obligation to provide that Disclosure Statement to a buyer. This simply is not true.

In a previous article I described a new law that allows an ailing or aging property owner to sign a Transfer At Death Deed while they are still living. This allows someone to transfer the property (immediately upon their death) directly to any person of their choosing without a Will or Probate. The property owners who take title pursuant to a Transfer at Death Deed are NOT exempt from the Seller Disclosure Act! They must still provide a completed Seller Disclosure Statement to the buyer even if they had never lived on the property.

On the Seller Disclosure Statement, which was revised recently, there are four columns that a seller can check in response to the questions asked (“Yes, No, Don’t know and Not Applicable)”. The checkboxes labeled, “Don’t Know or NA, get the seller off the hook in most cases unless it can be proven that they were fraudulent in their answers. Each section must include a mark in one of the four checkboxes or it is considered incomplete and the buyer can walk away from the transaction with their earnest money intact, clear up to the time of closing without recourse by the seller.

Jim Palmer, Jr.
509-953-1666
www.JimPalmerJr.com

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