Whether you are selling the home you have lived in for years or flipping the fixer-upper you have refurbished, you will need to make a series of disclosures to the prospective buyer before any deal can be finalized.
Texas legislation mandates that home sellers disclose any material defects in the property that could influence its value to potential buyers. Typically, these disclosures are executed through a form supplied by the Texas Real Estate Commission. Your realtor will provide this form to you and assist you in filling it out, and you are encouraged to seek advice from a real estate attorney should you have any inquiries.
What Must You Disclose?
The question most sellers have is, “What exactly do I need to disclose?” Texas law is very specific about this. Here is a non-exhaustive list of things you will be required to include on the disclosure notice:
- Are there any known defects in items such as central air systems, swimming pools, or satellite dishes?
- Is there a history of termite or other infestations?
- Has the house sustained any previous structural damage?
- Is there evidence of radon gas in the home?
- Is there lead paint in the house?
- Are you aware of any defects in the roof, walls, foundation, or electrical system?
- Does the house have any drainage issues or water damage?
- Did you have any water or fire damage?
- Did you have to make significant repairs?
If the disclosure notice says, for example, that the roof is damaged and needs to be replaced, this would be considered a material defect that could justify the buyer walking away from the deal or demanding a price reduction.
Timing of Disclosures
The buyer must receive the disclosures and have an opportunity to review them prior to the property purchase agreement taking effect. If the seller provides disclosures after the purchase agreement is signed, the buyer is free to terminate the deal within seven days of receipt.
Legal Implications of Failure to Disclose
If a seller fails to disclose a known issue and the buyer later has to deal with it, the buyer has the right to file a lawsuit for fraud or breach of contract. However, the disclosure form only needs to be completed to the best of the seller’s belief and knowledge. As a seller, you do not have to hire independent inspectors or engineers to assess the property’s condition.
