How complete should seller disclosures be?
Selling a home? Non-disclosed problems can not only greatly reduce the ultimate sales price, but also significantly increase the probability of costly litigation. This reality demonstrates why being proactive and consulting with a home inspection service before listing the home is highly recommended. This is especially true if the home is older. And the obvious is certainly true as well; if the seller tries to hide something, meticulous buyers will find out eventually. Appropriate disclosure of issues and above-board honesty is always the best policy.
It is common knowledge that all states have varying mandatory disclosure laws that require home sellers to disclose property defects. In California, the disclosure documents are very thorough and strictly enforced as delineated in Civil Code section 1102. Sellers are obligated to openly disclose known issues and are subject to lawsuits if they are found to willfully withhold important information. Though the disclosures do not have a specific deadline for delivery to the buyer, delivering them in a timely manner is a must.
Notable material defects most often involve foundation and structural problems, visible or obscured mold issues (especially black spores), aged sub floors, old pipes (chiefly polybutylene) and leaks, hazardous materials and exterior and interior damage from pests. Though good house inspectors find many issues to address prior to listing, they still have limits to what they can inspect. Most often, they are unable to check under the structure and overall are restricted to what they can see in the attic or reach in high ceiling corners to fully inspect.
Other “material” defects requiring adherence to specific disclosure laws not always privy to a home inspector include: properties that have additions that violate local building codes, property line fencing violations, zoning limitations for legitimate home additions, known drug-producing homes, a property that is located on land that has either been flooded or has a high probability of flooding, known sewer system connection issues (notably septic systems), or any death on the property occurring within the last three years, except when the death occurs as a result of acquired Immune Deficiency Syndrome (AIDS).