“Caveat Emptor.” Have you ever heard that term? In Latin it means “let the buyer beware.” It wasn’t until the early 20th century that this concept was slowly replaced by the act of disclosing issues about real estate. So, as a property owner selling your home, what must you disclose? And what is the buyer’s obligation to discover in this process?
The form mandated by Ohio Revised Code is called the Residential Property Disclosure. Some transactions are exempt from this form, but most transactions require this form be filled out by the property owner. When the buyer signs this form, he/she is not agreeing with the information, but simply acknowledging that they’ve received and reviewed it. The seller should disclose anything wrong with the house, such as if it’s been corrected, are any encroachments, hazardous components, etc. The buyer makes their offer based on that information. If the buyer gets a home inspection, they generally cannot ask for anything that’s been disclosed to be repaired. For instance, if three windows are non-functioning and were disclosed, the buyer based their offer knowing that information ahead of time. But if the home inspection discovers those windows as non-functioning, then the buyer has the right to ask for those to be repaired.
The list agent also has a duty to disclose anything they may notice that perhaps the seller failed to disclose, for example, a wet basement. If the agent sees water in the basement but the seller does not disclose it, the agent has a duty to disclose that information to any buyer agents that ask to show the property. The agent does not have a duty to discover the defect, but must disclose it if they see it or have received knowledge of it. Another example that can happen occasionally is information from the neighbors. Perhaps the neighbor notices the list agent putting a sign in the yard and comes over to tell the agent that the seller’s fence is on their property line or that there is a boundary dispute. Even if that information is inaccurate or the seller disputes that information, the agent has a duty to disclose that they’ve been told that there may be or could be a problem.
At times, a buyer’s agent may notice something while touring the property with their client. It may be two inches of water in the basement (that wasn’t disclosed), or missing shingles (that weren’t disclosed), or dripping water pipes (that weren’t disclosed). They now have a duty to inform the list agent, who also then must disclose to others. Most agents, when presented with detrimental undisclosed information, will ask the seller to revise the Residential Property Disclosure.
It is a seller’s duty to disclose all known defects and it is a buyer’s responsibility to do their “due diligence” to ascertain the condition of the home. Most buyers choose to hire a professional home inspector to determine future maintenance, remaining useful life-span of the mechanical components or any safety issues and concerns. If something is discovered during the home inspection that the seller was not aware of and is brought to the seller’s attention, the seller must now disclose that information to future potential buyers. For instance, wood boring pests may be found on a property. The seller has basically two choices at this point…either fix it for this buyer or disclose it to the next! For further information on this particular disclosure requirement, please visit ohiorealtors.org.
As appearing 7-29-16 in The Canton Repository. (www.cantonrep.com)