One of the biggest challenges associated with buying something used is that you know you are likely assuming someone else’s headaches. This is quite true when it comes to buying and selling real estate. While there should be a “buyer beware” mentality in the real estate market, there are certain things that sellers are obligated to reveal to prospective buyers.
Seller Disclosure documents are required in New Jersey. Even if they weren’t legally required, all buyers should be asking critical questions such as age of the HVAC system, the condition of the roof, whether there are or have been insect infestations, if there are foundation cracks, etc.
As the seller, you have no choice but to disclose information about these important issues if they may have an effect on the property’s value. In fact, it’s illegal to knowingly conceal information that would have an impact on the property’s desirability. For example, if you know your basement floods when it rains, concealing that information would be fraud.
However, before you cringe, know two things:
- Disclosing a past problem gives you the opportunity to reveal steps you’ve taken to mitigate the problem. For example, if there was a major roof leak but you put on a brand new roof, that’s a big plus for you.
- The law invokes an important word: “knowingly.” You can only disclose what you personally know about. So, for example, if you don’t know your basement is moldy and a prospective buyer finds out when an inspection is completed, you cannot be held responsible.
To take No. 2 one step further, you, as the seller, are not required to hire inspectors to turn up problems. That’s the buyer’s responsibility which is where the “buyer beware” thing comes into play.
However, if you do suspect a problem, even if you aren’t certain, it’s important to contact a knowledgeable real estate lawyer to find out whether you should disclose your concerns to potential buyers. If the issue is questionable, you could be held liable if the problem is unveiled in the future. A buyer could bring a case, for example, that there is no way you couldn’t have known about a problem. A savvy real estate lawyer will protect you from that type of liability.
Contact Joel R. Spivack, Esq. with your legal questions about buying and selling property in South Jersey. He has successfully guided countless clients through real estate transactions for over 25 years.