Must home's corrected defects be disclosed to buyers?
Future liability problems worry seller

Tuesday, May 24, 2021

By Barry Stone
Inman News

Dear Barry,

Before selling my home, I plan to hire a home inspector and shall correct every problem listed in the inspection report. Once these repairs are completed, am I required to disclose previous defects to buyers, or are past problems exempt from disclosure requirements once they have been fixed? – Joe

Dear Joe,

In a world uncorrupted by litigious madness and legal fault-finding, the answer would be, "No problem, Joe. Just repair the defects and move on with your life." Unfortunately, armies of determined tort practitioners, wielding the jagged edge of the law, have redefined the meaning of seller disclosure, extending it's practical limits to beyond infinity, replacing common sense and straightforward disclosure with uncertainty, fear and distrust, while abolishing the reasonable expectation that bygones can ever be bygones.

In the cold shadow of impending legal consequence, the answer to all disclosure uncertainties is simple: When in doubt, disclose. Even a repaired condition can pose liability problems if a home buyer, at some later date, discovers the repair history of the property and feels (or if his attorney feels) that you should have provided that information. The best defense against future liability and possible courtroom conflicts is to disclose everything. It is truly and sadly unfortunate that we must be so cautiously defensive, but such is the way that the zealots of civil liability have denigrated the foundations and culture of our business environment. (In all fairness, however, it should be noted that 98 percent of attorneys give the rest a bad name.)

In the final analysis, you can never be sue-proof, but the more you disclose, the better your odds.

Dear Barry,

The home we are buying has a non-permitted addition (an extra bedroom), as disclosed by the sellers. We're worried that this illegal add-on could cause us problems in the future. There could be complications involving the building department or difficulties with future buyers. The attitude of the sellers seems to be "take it or leave it." Should we insist that they obtain an after-the-fact building permit, or should we take our chances on an as-is purchase? – Greg

Dear Greg,

Problems may or may not occur with non-permitted construction, but the potential for future consequences warrants serious consideration. The worst-case scenario with an unapproved addition is forced demolition, by order of the local building department. Fortunately, outcomes of that magnitude are uncommon and typically only occur if a disgruntled neighbor files a complaint and if the addition is such that approval never would have been granted. A more common requirement of the building department would be corrective work to bring the addition into compliance with building standards. Whether these upgrades would entail moderate or excessive costs is unpredictable and therefore makes an as-is purchase risky.

In most cases, an "after-the-fact" or "as-built" permit can eliminate future concerns. A municipal inspector will determine that the addition complies with applicable requirements, some upgrades will most likely be required, and approval will be granted when the improvements are completed. In any event, asking the seller to obtain an as-built permit is generally a good way to protect yourself, rather than taking possession of a situation whose consequences cannot be safety predicted.

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Copyright 2005 Barry Stone


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