Seller Disclosure Report - KOTA Territory News

Seller Disclosure Report

By Samuel J. Tamkin, Attorney at Law, Studio One Networks

Do sellers have to tell you about problems in their home that you can't see? The answer, generally speaking, is yes, and most states require the seller to deliver this disclosure in writing, via a completed "seller disclosure" form.

Most states require sellers (even those selling "by owner") to disclose major defects known at the time the form is completed. If the seller has fixed a problem, the seller might indicate that he is "unaware" of a material defect relating to the home. But if the seller has repeatedly repaired the same problem, he should disclose this problem and indicate what has been done to take care of it.

Buyers should carefully review the seller disclosure form to see if the seller checked off any item to disclose a defect. If there are items checked off, hire a professional home inspector or other professional to investigate the situation further. If you've already had an inspector tour the home, ask if he'll come back to look into the defect listed.

You should also ask the seller for additional information about the cause of the defect and for the name of the person or company that made repairs to the home. Contact the repair company to determine what was done and what is the likelihood that the problem will return. Ask if there is something further the seller could have done to correct the problem.

If you close on the home knowing it has a defect and there is a recurrence, you'll have to pick up the cost of the repair, and probably won't have any recourse against the seller. However, if you close and there is a recurrence of a problem the seller did not disclose, you may have the right to seek reimbursement for your expenses for repairs under limited circumstances:

  • Can you prove the seller knew of the defect prior to selling the home? Did he have the defect repaired over and over again? Did he cover over the problem area, like painting a ceiling to mask a roof leak or painting a foundation wall to hide a crack or leak?

  • Can you find evidence that the seller took steps repeatedly to fix the problem? Frequently, neighbors know if contractors or repair people come to the home and they may be a source of information. Local repair companies can give you an estimate to repair the problem and may have provided similar estimates (and have copies) to your seller.

  • If you can prove that the seller knew of a defect, you'll need to determine whether the cost, time and effort of chasing the seller is worth it. Determine the cost of repairing the problem and if you can recover attorneys' fees if you prevail against the seller. Some states permit a buyer to recover attorneys' fees from a seller if the seller was required to disclose a defect and failed to do so.

Finally, if you decide to go forward, consult with the attorney or agent who assisted you in the closing of your home. They may be able to direct you to an attorney that specializes in seller disclosure issues and litigation.

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