Disclosure Laws

Concealing Defects

It is important to be absolutely candid with your agent and buyers about the condition of the property when you are selling your home. If there is anything wrong with the roof, the plumbing, the wiring or structure, it will probably not remain a "sleeping dog". "It" will probably wake up, snarl, growl and snap at your ankles at the precise moment your buyers feel their first stirring of buyers' remorse.
Concealing a defect is a serious matter when you are selling a home. It is unlikely that such defects will go undetected because most buyers get a structural inspection before they are contractually obliged to complete the purchase. Even if the problems do not surface before the closing, your liability does not end after the closing for any defects that may have been concealed. Buyers almost never accept misrepresentation graciously, but they can usually deal with a house that is short of perfection if they know what they are getting into from the beginning. When selling your home, your Realtor will provide you with a seller's disclosure form.

Disclaimer Clauses

Before the professional inspects the home that you are buying, you will be asked to sign an acknowledgment of the scope of the inspection. This document will probably include a disclaimer clause designed to relieve the company of responsibility if they should miss a defect. What happens if a defect is missed during an inspection?

The disclaimer clause may get the inspection company off the hook for a defect if there is no visual indication of a problem. If the inspector clearly indicated that he was not checking for that problem--many inspectors do not check for dry rot or inspect roofs--then the recourse will be limited. If negligence is involved, or if the defect should have been obvious to a professional inspector, the disclaimer is not likely to protect the inspector. If you find an undiscovered defect, discuss the matter with the inspector. Depending on the situation, the responsibility for remedying the problem may rest with you, the sellers, and/or the inspector.

Disclosure Laws

You just listed your home in the Overland Park area for sale, and you withheld a few "little" problems from the Realtor--the family room leaks, but only when it rains, the outlet in the back bedroom won't spark unless something is plugged in, and there is a stain on the oak floor in the living room which is covered with a rug.

It is a mistake to think that your home will sell more quickly by concealing the little (or not so little) defects. These seemingly small items can escalate into major issues which can threaten a sale, and possibly result in litigation. State legislatures and courts all over the country have passed laws regarding concealing defects from an agent or buyer. The essence of these laws is--DISCLOSE! If something in your home is not working properly or needs to be repaired, fix it or make sure that your agent discloses it to the prospective buyers. The court will probably not be understanding--or forgiving--if you claim ignorance about a problem, especially if you have lived in the house.

Full Disclosure

You are about to list your home in the Overland Park area. Since you have lived there for many years, you know that it is not perfect. There's a leak in the basement that is noticeable only after a heavy rain, the garage door sticks, the toilet in the master bath works like a fountain, and the dishwasher is prone to work stoppages.

Any home has some quirks. When it is time to sell your home, you have a choice of either making the repairs or letting the buyers know what the problems are, especially any potentially serious problems. Some buyers will want a structural inspection so that they will have a good idea about what they are getting into. Even if the buyers don't ask for an expert to look at the house, it is the seller's responsibility to disclose any defects in the property that they know about. A concealed problem may come back to haunt you after the closing. Many lawsuits involve undisclosed defects, and the settlement of these cases makes the cost of repair or the price concession during the sales look like a real bargain.

Potential Problems

Every house has some "quirks", and some defects that go a lot further than that. Placing a less-than-perfect house on the market is fine if you and your Realtor give the buyers information on any "hidden defects".

Most litigation in real estate transactions involves buyers suing sellers for failure to disclose something. Whether it is a leaky roof, dry rot, plumbing or heating problems, or a wet basement, most courts do not apply the "let the buyer beware" rule to real estate transactions. Even if the buyers had a structural inspection and the property was sold "as is", you may not get off the hook. Sellers have an obligation to disclose both obvious and hidden defects. Courts have not been sympathetic to sellers who have lived in a house and are in a position to know what works and what doesn't. This is one area where honesty is the only policy.