How much should you tell your home’s new owners?
Under Pennsylvania code a seller must disclose at a minimum:
A seller must disclose to a buyer all known material defects about property being sold that are not readily observable. This disclosure statement is designed to assist the seller in complying with disclosure requirements and to assist the buyer in evaluating the property being considered.
Most sellers have some amount of confusion when presented with the 10 page document titled “Seller’s Real Property Disclosure Statement”. They stress about what they should disclose and worry that they might forget something. I think the best approach is more is almost always better. Ask yourself if you would want to know about the issue, if the answer is yes then disclose. I have also noticed that a well filled-out disclosure puts the buyer more at ease and a level of trust is created.
What Types of Information and Defects Must Pennsylvania Sellers Disclose?
The standard form covers the home’s structure, such as the roof, basement, foundation and walls. Among other things, the seller also needs to disclose if the home has been treated for termites or has had water or sewage problems. Buyers need to be told if the house has been remodeled. The form covers plumbing, electrical, heating and air conditioning systems.
If appliances are included in the sale, then the seller needs to disclose the condition of these as well. Also there is a section for hazards or environmental contaminants. The disclosure also addresses title, insurance, or financial issues.
And just in case anything got left out, the form includes a section for “Additional Material Defects”‘ where sellers should disclose anything that didn’t otherwise fit the categories on the form.
What Types of Defects Are Not Included in the Pennsylvania Disclosures?
Pennsylvania courts have been very clear that the concept of the disclosure only applies to issues that can be repaired and have a fixed cost associated with the problem. In other words sellers need not disclose “psychological damage” such as those that would be attached to a stigmatized property.
Sellers do not need to disclose issues with the neighbors or neighborhood.
Items that are not considered material defects do not need to be disclosed, such as deferred or routine maintenance items. So no worries about the loose door knob or creaky steps.
One caveat: if you are a seller who has professional expertise in a related area, you will be held to a higher standard of disclosure than a home seller who has no experience in a related field.
As a seller I would be inclined to over-disclose, especially if I was unsure whether to call it a “material defect” or not – or to fix it before completing the disclosure form.