Many Northern Nevada sellers wonder what sorts of things need to be disclosed to their buyers in the course of a real estate transaction. For example, a typical email asks: Hey Linda, do I really have to tell the buyers about <insert your issue here>....?"
It is required by law that "a seller of residential real property in Nevada must disclose any and all known conditions and aspects of the property which materially affect the value or use of residential property in an adverse manner (see NRS 113.130 and 113.140)." This requirement is met by the seller preparing a document called a Seller's Real Property Disclosure (SRPD). It consists of four pages. The first two ask specific questions about the property's condition. The last two review the pertinent parts of the state law (in case you have trouble falling asleep at night). Real estate licensees are not permitted to help you fill out the form, except to answer general questions. Interestingly, the law states that you are not required to disclose information of which you are not aware. Gotta wonder what they're smoking at the state capitol sometimes.
My personal rule of thumb is: if it crosses your mind to ask "should I disclose it", then ala Nike, JUST DO IT! Buyers are almost never upset by things they know about up front. When they find them out later, a number of negative consequences may ensue, ranging from an attempt to renegotiate the contract to a full-on lawsuit, depending on the timing and the severity of the issue. It also makes them wonder what else you might be hiding. You DON'T want to go there.
Some prime examples:
- Do I have to tell them we had termites? We had them treated! Answer: YES!
- Do I have to mention there was water in the crawl space last summer when the sprinklers broke? It's gone now. Answer: YES!
- My husband built a deck on the back last summer, do I have to disclose that it was unpermitted? Answer: YES!
- My condo association has filed a construction defect suit against the developer, but I don't think my unit has any of the alleged problems. Do I still have to disclose? Answer: YES!
- My renter killed himself in the property, do I have to disclose that? Answer: No, but you might want to think long and hard about it. The buyers will certainly hear about it from the neighbors, and if this is going to be a deal-breaker for them better to just put it out there up front, in my opinion.
It IS possible for the buyer to waive his right to receive an SRPD. There is a specific form for that that must be signed and notarized. This is commonly a bank requirement when purchasing an REO property (foreclosure). I would discourage a buyer from agreeing to it in a normal sale though, and really, why would you, the seller, want to open yourself to that kind of liability? Having the buyer waive the form does not relieve you of the duty to disclose anything you know that is adverse about the property. Either disclose, or fix the problem and still disclose. In real estate, second only to location, location, location is diclosure, disclosure, disclosure!
Photo credits: Termite Damage by kirybabe, Flood Results by M. Keefe, both from Flickr via Creative Commons License
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