One of the phrases we hear all the time at Re/Max equity group and one which is constantly repeated by our Managers and company attorney  is “When in doubt, disclose, disclose, disclose.  No one ever got sued for disclosing too much”.

Recently, I received a call on this subject from an owner in another city in Oregon. I indicated to him when I submit a property disclosure form to my sellers, I always tell them to be honest in what information they will be providing on the form. If there are any known deficiencies, they need to indicate those. If there is a “yes” to a question that needs an explanation, they need to explain the reason for, or if, something happened and how it was corrected. Never, however, do I want them to say something they’re not absolutely certain of.  I remember when the disclosure statement became mandatory and there had been an owner that said there was insulation in a certain wall. Upon opening up that wall for whatever reason by the new buyer, there was no insulation and a lawsuit ensued. In other words, if you’re not sure there is insulation in all the walls, don’t say there is in fact insulation in every single wall. However, if you know the alarm system isn’t working and you say unknown or N/A on the form, that’s not good enough. You’ll need to explain what the problem is, if it’s been repaired, or what the current condition of that system is, etc.

We Realtors® can never fill out the form for the seller or provide the seller with the correct answers. I can explain what information the question is asking for or is needed, but it is your responsibility as a home owner to complete all the information truthfully and to the best of your knowledge.  If a property sells then sale fails due to a deficiency in the condition of the house, when it comes back on the market a new disclosure needs to be completed by the seller and given to a new buyer disclosing that deficiency.  With houses being on the market for such a long time, in some cases up to a year, a new disclosure form needs to be completed during the time the house has been for sale and possibly vacant.  Conditions of the home may have changed within that year the house has been on the market.

Now comes word from our National Association of Realtors® that the number one complaint and lawsuit is because a home owner or agent did not properly disclose the correct information to a buyer.  Disputes involving disclosure of a property’s condition now exceed disputes over agency issues, a catchall classification that includes buyer representation and breach of fiduciary duty, and issues involving the federal law intended to protect consumers from being overcharged at closing comes in third.

Water intrusion and mold problems that often follow are a major issue. Disputes concerning structural defects are also extremely common. And issues concerning septic and sewer systems, misstatements about square footage and “as is” clauses also generate more than their fair share of legal problems.

Many of these disputes arise when the seller is a bank. The problem with water and mold is linked to the foreclosure crisis and has become a larger issue due to the number of houses not being maintained or sitting empty for long periods of time.

Recently I read there are new laws for landlords renting their properties.  One of those new disclosures is that landlords must disclose whether the rental is in a 100-year floodplain.  Just because you are renting out your property, doesn’t excuse you for making disclosures to a new tenant as well.

Disclosure is an important aspect of a successful real estate transaction for all involved.  If you have any questions on disclosure, seek the advice of a real estate attorney.

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