Broker Tip: Three Tips for Disclosures that Protect You and Your Sellers
By Simon Offord, Esq.
One of the issues we continue to see on a regular basis are failure to disclose cases. Failure to disclose cases oftentimes result in the disgruntled buyer placing some level of blame on the real estate agents involved, so to the extent the agents can assist the sellers in this process, not only are the agents protecting the sellers, but they are also protecting themselves. This article is intended to help in this process.
Obviously, the cardinal rule is to be thorough, as the smallest omission could be considered concealment. Use these tips to avoid having to call us after mediation has been demanded or a suit has been filed. This certainly is not an exhaustive list, but is a good way to tighten up your disclosure process.
1. Require that your sellers take the time to fill out the Transfer Disclosure Statement and Supplemental Property Questionnaire themselves.
Make sure your sellers understand the importance of the TDS/SPQ by requiring they fill them out themselves, in their own handwriting. Sellers oftentimes do not take the disclosures seriously. This is oftentimes especially true when the sale is an “As-is” sale. Many sellers are under the impression that if their sale is “As-is” they do not need to disclose everything. NOT TRUE!
If there is not enough room on the standard forms, do not be afraid to provide an attachment. Consider also giving them a template or exemplar to use for the attachment. Include receipts of recent repairs as well.
Unless the agent takes the time to sit down with the sellers and stress the importance of the disclosures, you may be putting both the sellers and yourself at risk. Simply emailing the blank forms and asking they fill them out does not stress the significance of thinking through each question and providing all relevant information about the property.
2. Do not delegate!
It is not sufficient to merely direct the buyer’s attention to other documents. “See the Inspection Report” will not protect you or the client. You cannot rely on the buyers to actually read third-party reports, or understand what in those reports you are referring to. If there is something specific that you or your client are trying to convey and have personal knowledge of, actually put it in the disclosure!
3. Should I disclose ….?
One rule I thumb I like to use is if your client asks if they should disclose something, the answer should be yes! If, while preparing the disclosures, your client thinks something is important enough to ask you about, it is important enough to be included in the TDP/SPQ. This is not the time to sell the property, it is to protect the seller and agent.
In our experience observing the three tips above will go a long way in protecting you and your seller. Please visit the Law Offices of Peter N. Brewer blog and website to learn about other methods to protect yourself and for a host of other informative articles and information.