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Seller disclosure, what is a homeowner obligated to disclose?

On Behalf of | Feb 15, 2018 | Firm News |

Buying or selling a home is one of the largest transactions the average citizen will undertake during his or her lifetime. Given the amount of money at stake, both the buyer and the seller should understand the condition of the property that is being purchased and sold. The Pennsylvania Real Estate Seller Disclosure Law was designed to give buyers a comprehensive understanding of the condition of the property while discouraging sellers from hiding any known flaws or problems.

Known material defects

Before selling a home, sellers are required to fill out a seller discloser statement and disclose any known material defects. Sellers with greater knowledge in construction or related industries are held to a higher standard of discloser than a layman.

The law defines a material defect as “a problem with a residential real property or any portion of it that would have significant adverse impact on the value of the property.” Generally speaking, a material defect is something that simple maintenance will not fix.

What elements are included?

When completing the disclosure agreement, the seller should give information regarding structural elements such as the roof, basement, foundation and walls are assessed. In addition to the structural elements, the seller should also give information about the electrical, plumbing and HVAC systems. It is perfectly acceptable if the units are old, but all systems need to be functional and in good working order. Sellers should also disclose any information about termite treatments or water damage. Any remodeling done to the property also needs to be listed.

The seller should also list information about any major appliances that are included in the home sale, such as washer and dryer units. If the seller is aware of any hazard or contaminants in the home or on the property, such as radon or black mold, those also need to be disclosed. Lastly, if the seller knows about any title or financial issues with the home those should be listed as well.

Psychological damage disclosures

Although not required by law, it can be advantageous for the seller to disclose any additional psychological damage information. For instance, if the former home owner died of natural causes in the home or if a serious crime took place in the home. In all likelihood the buyer will learn of the home’s past eventually, whether from neighbors or another source. In many cases the buyers are not deterred by the information but they would rather know about it upfront rather than as neighborhood gossip later on.

A seller can face serious financial penalties for failing to disclose any known problems with the property. Buyers have two years in which a lawsuit can be brought against the seller. Often the seller is responsible for paying for the repairs to correct the material defect. As with most things, a home naturally deteriorates with age, but a thorough home inspection can help buyers and sellers alike feel confident in the sale.


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