WHAT YOU NEED TO KNOW ABOUT THE SELLER’S DISCLOSURE FORM

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WHAT YOU NEED TO KNOW ABOUT THE SELLER’S DISCLOSURE FORM
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This one form, filled out by the seller of a property, is more important than you may have realized. I compare it to a hard hat at a construction site. Seems overly precautious until a large piece of material falls from above and suddenly you’re awfully glad you had that protection!

In 1993, this form became mandatory, exclaiming that “Texans would be bound to truth in selling their homes…is designed to protect Realtors from the burgeoning number of ‘failure to disclosure’ lawsuits…the bill would require sellers to complete a disclosure form detailing the condition of the house, property and certain equipment within the house.”

What is it?

This statement is a disclosure of the condition of the property in compliance with the seller Disclosure Act. This statement is a disclosure of the condition and information concerning the property, known by the seller. Unless otherwise advised, the seller does not possess any expertise in construction, architecture, engineering, foundation, roof, or any other specific area related to the construction or condition of the improvements on the property or the land. This statement is not a warranty of any kind by the seller and is not a substitute for any inspections or warranties the buyer may wish to obtain. NOTE: For sale my owners are also legally required to provide this form.

Can your agent help you fill it out?

No. As Realtors, this would infringe on our duties to abide by the National Association of Realtors “Code of Ethics and standards of practice.” We are not lawyers and cannot give any advice or interpret any law regarding what the form says or means. If there are any questions, sellers need to consult an attorney.

Both TAR and TREC have a seller’s disclosure notice. Which to use?

Both forms are in compliance with the law. With that said, the TAR form is far preferred. It asks more questions, is far more thorough, is easier to fill out, spells out specific safety hazards the TREC form does not, is more useful for buyers and is designed to serve as a better risk-reduction tool for sellers. It is in your best interest as the seller to ask your agent to provide you with the TAR form.

Who is exempt from filling this form out?

There are 11 exceptions, but the most common are:

  • A builder of a new home
  • A trustee or executor of an estate
  • The lender after foreclosing on a property
  • Duplex owners

Even though these types of sellers (and a few others) are not required to provide a disclosure notice, they still must disclose any known material defects. Requirements of Section 5.008, all sellers have an obligation to disclose known defects about the property. Failure to do so exposes them to liability under the Deceptive Trade Practices Act or other civil laws.

What about previous death in the property?

The statute does not require disclosure of deaths by natural causes, suicide, or accidents unrelated to the condition of the property.

Previous Inspection Reports

If a seller bought the home within the past 4 years OR if a seller receives a copy of an inspection report from a buyer but the contract with that buyer falls through, the seller and brokers should consider sharing the report and they have a duty to disclose any known material defects. Possession of a prior inspection report may be evidence of the seller’s or broker’s knowledge of a known defect, although no law requires that the report must be provided.

Consequences When Sellers Don’t Disclose

A seller who doesn’t disclose known defects can be sued by the buyer after the defect is discovered. As a seller, you don’t want to look back after closing!

If a court finds the seller responsible, they may be required to:

  • Repairs and other damages resulting from the undisclosed defect
  • Pay the buyer’s attorney’s fees and costs of the lawsuit
  • Take back the house if the court invalidates or rescinds the sale
  • Punishment for punitive damages of failure to disclose defects

 

A surprise birthday party is fun…a surprise moldy house is not! Use of this form may result in fewer surprises to the buyer after closing and less liability for the agents and the seller(s). Don’t make your home sale any more challenging than need be. A seller’s accurate and honest disclosure is worth it.

Email: Whitney@Coastline-Properties.com
Office: 361-949-0101
Cell: 847-830-2087
Fax: 361-949-0192

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