New Jersey Real Estate Digest: To Disclose... or Not

Thursday, July 27, 2006

To Disclose... or Not

During the home buying and selling process there comes a time when the seller must disclose facts about the property for sale. In New Jersey the Disclosure Statement is about six pages and gets signed but the seller, the buyer, and the agents involved. It asks question about the house from the roof to the soil surrounding the property and the neighborhood looking to get information on age, maintenance, and repair of big ticket items, any hazards on the property.

Understanding that houses have quirks the question becomes do I disclose quirky things or risk a lawsuit down the road for nondisclosure of material facts?
Ward Lowe recommends in his article: Hazardous Duty:

“It’s probably best to strive for full and complete disclosure rather than attempting to determine if a particular buyer would find the information important in deciding whether to buy the property.” New Jersey Realtor (July 2006)

Assuming a seller intends to fully disclose the condition of the property is a seller qualified to answer question on things like dry rot, wood destroying insect infestation, aluminum wiring, or underground storage tanks? If the home was built before 1978, it is fairly safe to assume at sometime the home had lead-based paint applied to it. Since 1992 the federal government requires that all sellers disclose the presence of lead-based paint. Disclosure of the presence of lead-based paint in houses built before 1978 makes sense even if the seller is unaware of exact locations.

Disclosure is designed to protect the seller by putting in writing exactly what the buyer can expect in his or her new home. Major repair surprises generally end up in court and could prove costly if the nondisclosure claim finds the seller culpable. Disclosure helps the buyer plan for the maintenance and upkeep of the home. It is much easier knowing one has to prepare for a new roof in ten years then it is to have no idea when the roof had attention. Full disclosure makes the buyer aware of just what he or she is getting for their investment dollars and leaves the seller unconcerned about future nondisclosure culpability.