Buying a home or other real estate can be an intimidating prospect, especially if the property is several years old. You never quite know what you are getting, and you may not find out until months or years after you move in. However, one aspect of the real estate buying process can help minimize the chances that you will end up with a property that is more trouble than it’s worth.
If the seller of your home, commercial property or other investment is honest and forthright in the disclosure statement, you will likely have a better chance of making an informed decision about whether the property’s flaws are worth the risk. Like most states, Texas requires real estate sellers to complete a form detailing the condition of the property. Do you know what you can expect the disclosure statement to tell you?
What should I know?
Each state has different requirements for real estate disclosure. Some are quite rigid, and others require sellers to reveal very little about the condition of the property. Federal law requires sellers of older properties to disclose the presence of lead paint, and Texas has some very specific rules of its own. For example, the person selling the property you are interested in must disclose the following, to name a few:
- Active termites or evidence of past termite infestation
- Flooding of the building or property
- Damage, defects or repairs to the roof, foundation or other structural elements
- Knowledge of fire damage, whether the fire resulted from a mechanical defect and whether the owner had the defect repaired
The owner does not have to tell you if someone died on the property, suffered from AIDS or another infections illness, or whether the owner believes the property to be haunted.
Your legal rights
A disclosure statement, which the seller should provide soon after you put down your earnest money deposit, is not the same as an inspection. The disclosure reveals issues the property owner is aware of, and the inspector goes searching for problems of which the owner may not know. Additionally, the inspector will only report defects that he or she discovers on the day of inspection. For example, windows that leak only when it rains may not be obvious to the inspector on a clear day.
Sellers who are particularly eager to get to closing may attempt to cover defects they should reveal, such as painting water stains on the ceiling to conceal evidence of a leaking roof. When this happens, you may find yourself facing the high cost of repairs that are unexpected and unfair. You may also wish to seek legal advice about your options for pursuing redress through the civil courts.