A disclosure statement in a real estate sale is a document completed prior the closing which requires the seller to disclose known material defects of the home. The disclosure statement is an opportunity for the buyer to learn about all potential defects of a home. The disclosure statement is also an opportunity for the seller to disclose all defects prior to the sale of the home, which can protect the seller in the future if an issue arises.
The requirements for disclosure statements vary significantly among states, counties, and even cities. However, they typically require disclosure of material defects of the home and property.
These material defects include, but are not limited to:
As a buyer, it is crucial to review each disclosure carefully and asking questions about each if necessary. A home inspection by a third party is also an important step to purchasing a home, but an inspection is not the same as a disclosure. In fact, a home inspection may reveal issues in the home of which the seller never became aware and would not be required to disclose.
If a problem with the property arises after the closing, a buyer may be able to sue the seller for failure to disclose a known defect. However, this can be difficult to prove and depends on many facts specific to each sale. For example, it depends on whether the previous owner knew about the issue. It also depends upon whether the defect is material. Because of these issues, sellers should err on the side of disclosure when selling a home to avoid later problems with a disclosure statement.
If you have noticed an issue with a disclosure statement or need assistance in filling one out in the sale or purchase of a home, contact O’Keeffe O’Brien Lyson Foss in Fargo, North Dakota for assistance or call 701-235-8000 or 877-235-8002.