When it comes to putting your home on the market for sale, there are several areas that are important to disclose to your agent and potential buyers before and during the sale of the property. Failure to disclose many of these areas can result in harsh penalties, depending on the state that you are in as well as the loss of buyers without penalty during the transaction.
There are requirements to disclose items called material facts, which include things like mould, illegal drug manufacturing if the property has been subject to floods in the past and serious or violent crimes that have occurred at the property.
Failure to disclose these areas could result in the buyer walking away without penalty.
In many states, there are requirements around loose-fill asbestos that may be contained in the home. It is also important to disclose if you are knowingly aware of asbestos in the home. If this is not disclosed, it may be picked up by building inspectors during the sale process which could mean penalties to you as a seller.
In more recent times, we have seen reports of building defects in some newer apartment buildings that have involved larger final ramifications. It is important that any known potential defects are disclosed as these are likely to be noticed during building inspections which may mean that the buyer will want to negotiate on the final sale price, or they may walk away from the sale.
Property Titles and Consents
If the property is subject to covenants, zoning, renovations, or easements, these should all be disclosed during the sale.
Disclosures under these categories could include shared driveways, water easements for authorities if developments have covenants around landscaping, streetscaping or fencing designs and requirements or zoning in areas of flood, fires, or specific developments.
You should also disclose if there are disputes in relation to any boundaries or fence lines that may cause a challenge to the sale.
If you have current tenants at the property, it will be important to disclose the sale to the tenant as well as any fixed-term leases and their terms that are in place to the potential buyer.
If there are longer-term tenancies in place that are 20 years or more, many states have specific requirements around occupancy and termination that should be disclosed, especially in cases where the buyer may be looking at owner-occupation rather than investment.