Thursday, May 17, 2012

Sellers: 6 Disclosures That You Must Make 2-5

2. Termites
One such invisible problem is termites. If your home has a history of termite infestation, especially if it has been treated more than once, it should be disclosed to the buyer, because it can greatly affect the value of the home.

To lessen the impact of this disclosure, sellers can get another termite inspection before listing their home that shows it to be clear of the pests. This disclosure, along with any information about treatment warranties that could be transferred, should be given to the buyer at closing.

3. Water damage/mold
If the home has had a leaky roof, a flooded basement or dampness and mold in certain areas, these water issues must be disclosed.

A good home inspector can often spot the signs of water damage, even if they have been painted or plastered over. But it's no sure thing. That's why water damage is one of the biggest causes of disclosure-related lawsuits.

One buyer had to call out a plumber soon after the purchase for some serious flooding in the basement. Once there, the plumber told the buyer, "I was just out here six months ago for the same thing." The sellers were successfully sued for not disclosing this fact.

4. Lead
If you are selling a house built before 1978, you must comply with a federal law that requires disclosure of all known lead-based paint and hazards in the house.

Buyers must receive a copy of the Environmental Protection Agency pamphlet "Protect Your Family from Lead in Your Home" and they must be allowed a 10-day window to test the house for lead.
The contract must include that warning as well as signed statements from all parties verifying that the requirements for disclosure were met. If a seller doesn't comply with these requirements, the buyer can sue for triple the amount of damages suffered. More information from the EPA on lead disclosure is available here.

5. Natural hazards
Some states, such as California, require sellers to disclose any risk of natural disasters such as a flood plain or earthquake zone or susceptibility to wildfires. This disclosure is meant to warn buyers of the financial risk and danger they face from these catastrophes, as well as alert them to trouble they may face in getting insurance for a home in that location.

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