The Pennsylvania Seller’s Property Disclosure: The Importance of Getting it Right and the Consequences of Getting it Wrong
The Pennsylvania Seller’s Property Disclosure:
The Importance of Getting it Right and the Consequences of Getting it Wrong
Every Pennsylvania home seller must complete a Seller’s Property Disclosure form before putting their house up for sale. The form requirement is in response to a Pennsylvania law requiring residential property sellers to disclose any ‘known material faults’ with the property that are not apparent to prospective buyers. Material defects may include structural issues such as a leaky roof, plumbing, and septic system.
The Pennsylvania Seller Disclosure Law applies only to residential property. It requires a home seller to notify a buyer of the material defects in the form of a dated and signed seller’s property disclosure. The requirement ensures sellers do not conceal major flaws or concerns that may significantly impact the property’s value or pose unreasonable risks to the buyer or those who will live in the property.
What Must Property Sellers Disclose?
While the law does not require the seller to inspect the residential property when completing the disclosure form, it requires them to disclose any material defect they know or have reason to know of. The obligation to disclose lasts throughout the sales process, and the seller must notify the buyer of any inaccuracies they may discover before closing.
Typically, some property defects are hard to identify for home sellers unless they have the necessary construction and building expertise. Accordingly, Pennsylvania law expects sellers to disclose information relevant to their professional knowledge. Therefore, a seller should disclose their level of training in architecture, construction, building, and related expertise on the property disclosure form.
Besides relevant expertise, the law also requires property sellers to disclose specific information concerning the home, including the following:
- The date the seller last occupied the property
- Roof structure, age (if known), and quality
- Basement and crawl spaces
- Structural issues
- Additions, remodeling, and structural changes to the home
- Plumbing system
- Water and sewage system
- Electrical system
- Heating and air conditioning
- Presence of termites or other wood-destroying insects and pests
- Presence of hazardous substances
- Any legal issue affecting the property title or that would interfere with the use of the property.
The Consequences of Failing to Disclose a Defect
Even in a real estate market with expert realtors or where homes sell quickly, it is essential to understand your duties and obligations as a seller, including what material defects to disclose to a buyer. Failure to make the required disclosures can result in a lawsuit by a buyer discovering a defect.
Despite the Real Estate Seller Disclosure Law’s requirement to disclose a residential property’s material defects, a seller is not liable for defects they knew nothing about or those they reasonably believed were corrected. Home sellers may also escape liability if they rely on information from certified professionals, including home inspectors.
There are, however, legal consequences for sellers who conceal relevant information regarding known material faults. Such a seller may be held liable for the cost of repairs and other actual damages the buyer paid or will have to pay to correct the defect. In addition, a home seller might have to pay other damages. The Pennsylvania Real Estate Seller Disclosure Law allows a buyer to sue for three times the actual amount of damages. A buyer might also sue the seller for fraud.
Will a Real Estate Agent Be Held Liable for Undisclosed Defects?
Besides suing the seller for damages, a buyer can also recover damages from the seller’s realtor if they were aware of the concealed property defect. However, a home buyer will need to prove that the realtor knew of the material defect. Similarly, a buyer may have a legal claim against a home inspector if they can prove the inspector failed to find a defect that should be obvious to someone with similar expertise or professional knowledge.
Buying and selling residential property is a delicate transaction, and if not careful, can be extremely costly. As a seller, you should disclose known material defects in order to avoid a costly lawsuit under the Pennsylvania Seller Disclosure Law. If you are a home buyer and believe the seller may not have disclosed a defect, it is essential to get the help of a qualified real estate attorney to determine your rights in seeking redress. Likewise, if you sold a house and are at risk of being sued by the buyer for failure to disclose a material defect, contact an experienced attorney to determine your defenses.
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