It’s in Seller’s Best Interest to Disclose Defects to Buyer
Question: When we bought our home eight years ago, our inspector found several problems including ungrounded outlets and an addition built without a permit. We were eager to close escrow, so we bought the property “as is” and never asked the seller to fix anything.
Now we’re ready to resell the property and wondering what to do about the defects. Should we repair them, should we disclose them to buyers, or can we just play dumb and let the next inspector point out what he finds to the buyers?
Answer: Your initial mistake was not addressing the problems that were raised by your home inspector when you were the buyer. You might have persuaded the seller to apply for a permit on the bootlegged addition and to bring the electrical defects into compliance with accepted building standards. That was a missed opportunity. Now that you’re ready to sell, take caution: Don’t compound old errors with new ones.
The best and safest approach as a seller is to disclose all that you know. This will keep you out of legal trouble and increase the likelihood of an as-is sale. Many buyers willingly accept defects that are presented in a straightforward manner, at the outset of a sale.
When problems are revealed later, in the course of the transaction, they are generally viewed more critically. The key here is timely disclosure. The last thing you should do is play dumb. Don’t leave matters to chance--to be discovered by the buyer’s inspector. Consider the possible outcomes with this risky approach.
If the inspector discovers conditions that should have been disclosed by you, the buyer might suspect that you were withholding information. Confidence is an indispensable cornerstone of every business relationship. Undermining that trust could jeopardize your sale. Worse still, the inspector might fail to discover the problems in question. This would leave faulty conditions undisclosed, to be revealed at some future date, after the close of escrow, and that could foster protracted legal conflict.
To avoid costly courtroom controversy, here are three words of advice: Disclose, disclose, disclose!
Inspector Is Accountable to the Client Only
Q: As a home inspector, I’ve had a disagreement with a seller and am looking for some clarification on two issues. First, my report disclosed missing window screens. The seller disagreed with this disclosure because screens are not listed in the purchase contract as items to be repaired. The other problem involved distribution of the inspection report. This is an issue I run into from time to time.
The buyer who hired me wanted to keep all copies of the report and refused to share them with the seller or the agent. They insisted that I provide copies, but I felt bound to respect the wishes of the buyer. What are your opinions regarding these conflicts?
A: Disagreements of this kind are the common bane of home inspectors, due in part to the relative newness of the home inspection process in the world of real estate. In today’s market, many sellers are having their first experiences with home inspection, and some tend to stencil their preconceived expectations on an unfamiliar process.
The responsibility of a home inspector to the client (typically the buyer) involves some very sensitive issues and requires broad understanding by all parties in a transaction. Occasional misunderstandings in this area are inevitable. Regarding your two questions, your general approach is well-founded.
* It doesn’t matter whether window screen replacement is contractual. Your job is to list all visible defects. The decision to repair, not to repair, or who should repair, is a matter for negotiation between the parties in the transaction and is not the business or concern of the home inspector. The job of the inspector is to provide information, pure and simple, not to make contractual interpretations.
* All copies of the report are the property of the client--in most cases, the buyer. It is the client’s choice whether to share these copies with others. In some cases, the purchase contract obligates the buyer to provide report copies to the seller, but again, interpretation and implementation of the contract are not within the province of the home inspector.
People may become angry with home inspectors when copies are not distributed, but the hands of inspectors are tied in this respect. All they can do is explain as politely as possible that they are legally bound to carry out the wishes of their clients.
If the contract calls for report distribution, that is the responsibility of the client.
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If you have questions or comments, contact Barry Stone through his Web site at https://www.housedetective.com. Distributed by Access Media Group.
