Why a Sellers Disclosure Notice is Important

Why a Sellers Disclosure Notice is Important

The original Seller’s Disclosure Notice requirement first went into effect in Texas in 1994. If you’ve sold a single family home in Texas in the last 20 years or so you’ve more than likely completed a Seller’s Disclosure Notice. Most sellers consider this document tedious to complete but accurately disclosing the condition of your property is one of the most important things you can do. Since both the buyers and sellers sign this document, it’s written proof that you’ve disclosed what you know about the property.

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The Seller’s Disclosure Notice shall be completed to the best of the seller’s belief and knowledge. A seller has a duty to disclose material facts that could not ordinarily be discovered by a buyer, or that a reasonable inspection would not discover. But a seller has no duty to disclose facts that he or she doesn’t know. A seller’s broker also has the same duty to disclose as the seller does.

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The Seller’s Disclosure Notice provides residential buyers with important information about the property such as: what appliances, equipment, and features exist on the property and whether or not these items are working; plumbing, a/c or heating defects; structural issues; termite treatments; previous fires or flooding; HOA info; and roof condition. There’s also other important notices in the disclosure that’s in a seller’s best interest to have a buyer acknowledge.

Who’s Exempt

Seller’s Disclosure Notices are required in most Texas real estate transactions that involve single family homes. Some sellers mistakenly assume that if they never occupied the property, they are exempt from the disclosure requirement. Here’s a summarized list that may exempt you from the notice:

  • pursuant to a court order or foreclosure sale;
  • by a trustee in bankruptcy;
  • to a mortgagor or successor in interest, or to a beneficiary of a deed of trust by a trustor or successor in interest;
  • by a mortgagee or a beneficiary under a deed of trust who has acquired the real property as a sale conducted pursuant to a power of sale under a deed of trust or a sale pursuant to a court ordered foreclosure or has acquired the real property by a deed in lieu of foreclosure;
  • by a fiduciary in the course of the administration of a decedent’s estate, guardianship, conservatorship, or trust;
  • from one co-owner to one or more other co-owners;
  • between spouses resulting from a decree of dissolution of marriage or a decree of legal separation or from a property settlement agreement incidental to such a decree;
  • to or from any governmental entity;
  • of a new residence of not more than one dwelling unit which has not previously been occupied for residential purposes; or
  • of real property where the value of any dwelling does not exceed five percent of the value of the property.

Not providing a Sellers Disclosure Notice when required can give a buyer the right to terminate the contract. Also, its in a sellers best interest to fully disclose the condition of their property. If a seller forgets something, their neighbors may not.

***This post is not a substitute for the advice of an attorney.***

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