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More on Seller Disclosure

By James L. Goldsmith, Esquire

Pennsylvania's Seller Disclosure Law has been in effect for over 13 years now! Many of the properties that sell today have sold one or more times since written seller's disclosures have been required. For those properties, there are paper trails of past disclosures which will show whether a disclosed defect is disclosed on to the next buyer.

Is a seller obligated to disclose the defects that were disclosed to him/her? It depends. A condition reported as a defect in the past may not be a defect today. The law obligates sellers to answer truthfully the questions on the disclosure form and to note any other material defects to the property. The fact that a condition was a defect in the past does not mean that it remains so today.

It is appropriate for sellers to consult the disclosure statements they received when purchasing the subject property. These forms may serve as a reminder of conditions that have not been repaired and which might be considered to be a defect by a judge an/or jury. We are all familiar with the better practice is to disclose, disclose, disclose.

The disclosure requirements of Pennsylvania's law are designed to have sellers consider the condition of their property and report their experiences and knowledge of that condition. Nothing specifically requires a seller to reveal prior disclosures or the contents of prior inspection reports. A prudent listing agent may, nevertheless, ask to see any inspection report and disclosure statement that the seller received at the time of purchase.

More important than even reviewing past disclosures is a review of the current disclosure to make sure it is complete. More than half of the disclosures that I review when defending failure to disclose suits are incomplete. All too often there are unanswered questions, boxes not checked, and details unprovided. You can imagine the impact an incomplete seller disclosure statement will have in litigation! Though the disclosure obligation rests with the seller, a listing agent may be liable to the seller when questions go unanswered. As a listing agent, do yourself a favor and review thoroughly your client's disclosure form. If incomplete, or if details are lacking, remind your seller of his/her potential liability for not fully addressing all questions. Likewise, as a buyer agent, review the disclosure form and help your client seek answers that are vague or missing.

The national experience with seller disclosure is that disclosure forms, when used properly, reduce liability and lawsuits. When answered incorrectly or incompletely, they serve as evidence in malpractice and misrepresentation suits. Avoid becoming a victim.

Copyright © James L. Goldsmith, Esquire,
CALDWELL & KEARNS, P.C., 2009
All Rights Reserved

Jim Goldsmith is an attorney with Caldwell & Kearns and serves as general counsel to PAR. A substantial portion of his practice is dedicated to providing advice and counsel to real estate licensees. He and his firm represent and defend real estate salespersons and brokers in civil lawsuits and licensing claims across the Commonwealth. Jim also defends REALTORS® in disciplinary hearings conducted by the Real Estate Commission. He routinely counsels employers on employee relations issues and is one of the voices of the PAR Legal Hotline. He may be reached at www.realcompliance.com.

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