What is the #1 single issue that lands more sellers in court–even years after the house has sold? The answer is “lack of disclosure.” If you’re the seller, you need to know that Colorado law follows a doctrine of “implied habitability” rather that “buyer beware.” This means that home sellers are presumed to be selling a home that is habitable, structurally sound, and functional–unless a buyer has been informed otherwise.
Remember that no property is completely perfect so revealing your property’s flaws in a fair and balanced manner will not necessarily kill the deal. The disclosure statement simply affords both parties an opportunity to enter int the deal with both eyes wide open.
Let’s look at the types of situations a home seller is expected to disclose:
Seasonal problems: Do you have any mice in the attic, but they’re only a problem in the spring? Does melting snow cause water problems in the basement that is evident only after a large snowfall begins to melt? These must be disclosed.
Legal issues: Is there a history of property line disputes? Are there any liens on the property? Has any remodeling been done without a permit?
Hidden material defects: Does the roof leak? Is there a crack in the foundation? Do you have a septic tank that is breaking down? Is the plumbing “iffy?” Basically, a material defect is defined as anything that would devalue the property in the buyer’s mind.
Environmental issues: Does the house have a high radon reading? Does it contain lead-based paint? Do you have asbestos in the house? If sellers are aware of those types of environmental problems, they should disclose them in writing.
Future problems: Are neighbors planning an addition that will block your view? Is the city putting in a high voltage tower on the lot next door? Are the neighbors a nuisance? Are you aware of any proposed transportation projects (such as a light rail project) that may affect the property? in short, if you are aware of anything that might affect the value of your homes, it must be disclosed.
Stigmatized property: Was a murder or suicide committed in the house or on the property? Is the house considered “haunted?” When it comes to disclosing something about a house that could be considered psychologically-stigmatizing, the Colorado law is a bit confusing and gray. The fact is–if you don’t disclose something bad that happened in the house and the buyer later sues–even if you win in court, wouldn’t you rather stay out of court in the first place? Depending on the individual circumstances, you may want to consider consulting with a real estate attorney on this issue.
A good rule of thumb: In short: if you are debating whether or not to disclose something to buyers, you should probably do so. This is certainly an area in which a real estate professional can provide valuable guidance.
In today’s complex real estate world, ignorance of the rules and regulations can land a seller in hot water. As a seller, having a real estate professional by your side will help you make the kind of decisions that ensure a smooth, trouble-free transaction. When you’re ready, don’t hesitate to call and let’s talk!