Full Disclosure About Your Home

Disclosing the defects in your home.

May 6, 2007 Joel Nash

Utilizing the Seller Property Information Statement can save you time, money and your sanity.

It has been said that the truth shall set you free. Yet there is the, don’t ask, don’t tell policy in the American Military. Our parents told us to always tell the truth. Yet the press has the right to not reveal their sources. The truth seems to be a grey area in so many instances it is not really surprising that homeowners struggle with what to disclose about their home and what not to disclose.

There has certainly been some conflicting information regarding the use of Seller Property Information (SPIS) forms. One person tells us it legally we are not obligated to use the form. In some instances if the forms are knowingly filled out incorrectly the vendor can be sued, because they did not disclose a defect in their home.

When not putting what you know about the home in writing, you remain liable if you do not disclose a known defect in the home. Even latent defects can become the responsibility of the vendor in the event that they are uncovered after closing.

This is certainly a situation where your damned if you do and damned if you don’t. Either way you must fully inform any potential buyer that there is a defect within the home that needs attention. These defects include, but are not limited to aluminium wiring, knob-and-tube wiring, galvanized plumbing, mould, termite infestation, and any other structural issue associated with the subject property.

In essence the SPIS frees you from a substantial amount of personal liability, as long as you fill it our honestly. The burden of proof in this case falls to the buyer, because they must now prove that you knowingly did not disclose the defect in the Information Statement.

If the SPIS is not filled out then your personal liability is increased. The burden of proof falls to the vendor. It puts the vendor in a situation where they must prove that they did everything in their power to inform the buyer of all known defects.

The other issue that is prevented by providing a full disclosure of latent and known defects is that the potential buyer cannot come back and renegotiate a contract based on a disclosed item. This offers an element of protection to homeowners, even though it may alienate some potential buyers. The work, time and effort put into getting a signed, accepted offer can be substantial. That time and effort can become futile if a defect is not properly disclosed.

The copyright of the article Full Disclosure About Your Home in Mortgages/Loans is owned by Joel Nash. Permission to republish Full Disclosure About Your Home in print or online must be granted by the author in writing.