Real Estate Seller Disclosure Law

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A Checklist of Issues that a Listing Agent Should Review with Their Seller

By: James L. Goldsmith, Esquire

The disclosure of a home’s material defects didn’t begin with passage of the Real Estate Seller Disclosure Law (“RESDL”).  Pennsylvania common law has long required that sellers disclose latent and material defects.  The problem, prior to the use of the mandatory form required the RESDL was that sellers often overlooked problems.  In the old days we elicited material defects by asking the seller, on the listing agreement, if he/she was aware of any material defects.  The seller was given two lines to explain.  We know that disclosure is more meaningful when the sellers are required to systematically review pages of questions and provide answers.

No system is perfect and despite having to complete a fairly comprehensive disclosure form, defects frequently go unreported.  Unreported defects are more likely to lead to lawsuits, including suits that include real estate agents and brokers.  It is therefore important to you that your sellers do a thorough job in reviewing and revealing anything that might be considered a material defect.

“Disclosure, disclose, disclose” is the frequently uttered mantra of listing agents.  I think we can do better.  Here is a checklist of issues that a listing agent might review with their seller in order to elicit problems that otherwise might go undisclosed.

Recurrent repairs.  Has the seller had to make repairs to a single issue on multiple occasions?  Maybe that leaky transom above the front door is in great condition now, but how many times over the past 10-15 years has it leaked?  If a buyer experiences a leak at this location post-settlement and learns that this undisclosed problem occurred before, it will be viewed as very suspect.  Ask your sellers if they have had to make repairs to a particular item or system on more than one occasion and encourage disclosure where appropriate.

Insect infestation.  Has the seller ever hired a pest control company?  If the answer is yes then something should be included in the seller disclosure, no matter how long ago the treatment was made.  “Having called XYZ Pest Company 12 years ago for ants” is not likely to prevent a sale.  If the buyer only finds out about the past treatment after the buyer has discovered infestation, expect a suit.

Maintenance deferral.  I have had several cases involving sellers who are systematically upgrading their home.  Perhaps they are replacing older siding and they’ve made repairs/replacement to part of but not the entire home.  Sellers sometimes view their anticipated future repairs as “maintenance” rather than seeing the underlying problem as a material defect.  What will the buyers think when they meet a contractor who says “Yeah, I told the sellers that they had to replace/repair that”?  Ask your sellers to identify what areas they have been working on or would have worked on but for a sale, and err on the side of disclosure.

You have a role in assuring that sellers take seriously the careful completion of a disclosure form.  When sellers don’t understand the gravity of the form or the scrutiny that will later be case upon it, they are going to look to you.  Listing agents, protect your sellers.

Copyright © James L. Goldsmith, Esquire, 2019
All Rights Reserved