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The information provided below is general in nature and thus,
may not apply to your situation. Before relying on this information,
you should consult with your legal and/or tax professional.
These lawfully required disclosures are the most important aspect
of the transaction for the seller. Sellers are required to disclose
conditions "that materially affect the value and desirability
of the property." What does that mean? It means disclose everything
you know about the property. There is a long list of disclosure
forms that are legally required to be given to the buyer by the
seller.
The most important is the Transfer Disclosure Statement (TDS) and
its supplement. On these forms the seller must disclose all conditions
that "affect the value and desirability of the property".
This duty is broadly worded to extend beyond the property itself.
You should therefore describe conditions known to you that are not
within the boundaries of the property. This means neighbors, visiting
varmints, and any other situation that would affect a reasonable
person who lives at your property. If the disclosure forms do not
contain a question relating to the condition at hand, you must describe
it anyway. Make sure your written disclosures include everything.
Finally, the seller must disclose if anyone died on the property
within the last three years.
In a real estate transaction, the seller should always take precautions
against being sued by his or her buyer. The seller's only duty to
the buyer is to disclose, as described above. If the buyer later
decides to look to the seller for liability, the attorney for the
buyer meticulously reviews the seller's disclosure statements attempting
to match up the condition the buyer is complaining of with the seller's
failed or incomplete disclosure. If the condition is something you
knew about and if it is not listed in your written disclosures,
you are liable. The answer, then, is always to DISCLOSE, DISCLOSE,
DISCLOSE.
The problem with seller liability is the statute of limitations.
In some situations, the buyer can sue the seller as long as four
years after the buyer discovers the condition that was not disclosed.
The buyer may not even discover the condition for years and years
after escrow closes, and then he has as much as four more years
to sue you. Thus, potential liability to the buyer for non-disclosure
can lurk for a long time into the future.
There are also further disclosures required by any owner of a common
interest property. One form is completed by the owner while the
other form is sent to the managing association. The association
completes its disclosures and produces association documents including
CC&Rs for the seller to transmit to the buyer.
The information provided above is general in nature and thus,
may not apply to your situation. Before relying on this information,
you should consult with your legal and/or tax professional.
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