Realtor irked by disclosure advice
DearBarry,
As aveteran Realtor, I’m writing to disagree with the advice you gave in a recentcolumn. Basically, you said that sellers should provide additional informationto buyers if they believe the home inspection report is incomplete orincorrect. This is very misleading to your readers. There’s nothing in thedisclosure law or in the disclosure forms that compels sellers to double-checkor amend the disclosures in the home inspector’s report. How can a seller knowmore than a home inspector about property defects? And since when are sellersexpected to review and correct the findings of a home inspector? This kind ofmisinformation can create confusion in real estate transactions and mayincrease liability for everyone involved. Don’t you think this warrantsreconsideration? –Michael
DearMichael,
It appearsthat you gathered more from my recent article than was intended or implied. Byno means are sellers required to scrutinize the accuracy or thoroughness of ahome inspection report or to amend a home inspector’s findings. But this doesnot excuse sellers from speaking up when an obvious oversight or inaccuracy inthe inspection report is discovered.
Realestate disclosure is a liability mine field upon which sellers, agents and homeinspectors must cautiously tread, and the letter of the law is not always thefirst and last word of prudent direction.
Transferdisclosure laws consist of typically complex, legalistic verbiage, but inessence, they are quite simple. Basically, sellers and agents must disclosewhatever they know that could be of concern to a buyer. That’s it. We can parsethe finer points of legalese and scrutinize whatever loopholes might be found,but what truly matters is that no significant information about the property bewithheld by anyone. If the sellers read the home inspection report and realizethat the inspector has incorrectly reported a condition, should they saynothing? If so, what happens when the buyer discovers the truth after the closeof escrow? If a lawsuit ensues, are the sellers absolved of responsibilitybecause they were not obligated to critique the inspection report?
The bottomline of real estate reality is liability exposure versus liability reduction.Those who participate in the business, either as professionals or as investors,should know this. Articles on disclosure liability abound, particularly inprofessional real estate journals. Seminars on disclosure procedures arefeatured at nearly all real estate conventions. It therefore behooves allagents and brokers to do whatever is reasonable and prudent to minimize thelikelihood of legal encounters after transactions have closed. This, of course,includes the counseling of sellers to disclose to the max, whenever possibleand without reservation.
In today’sreal estate environment, as in most fields of business, everyone is subject topotential assault by a vigilant army of litigious attorneys. If that were not so,the real estate purchase contract would still be a one page construct, we wouldhave no transfer disclosure laws, and there would be no home inspectors toamplify the disclosure process.
Towrite to Barry Stone, please visit him on the Web at www.housedetective.com.
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Copyright 2006 Barry Stone
