What good are seller disclosures statements?

Posted6/12/2022 6:00 AM

Q: When we purchased our home, the seller filled out a Transfer Disclosure Statement (TDS), supposedly reporting everything wrong with the property. Aside from disclosing a ceiling stain in one of the closets, the disclosure form told us nothing. So we purchased the property with that understanding. After moving in, we found an endless array of plumbing and electrical problems, with repair costs exceeding $15,000. So please tell me, what is the value of a TDS form?

A: In most cases, TDS forms are of little value. Sellers in most states are required to fill out one of these documents, declaring all known conditions that are faulty or unfavorable. The form should list every known defect, whether it be physical damage, leakage, inoperability of an appliance, or any condition that could adversely affect a buyer's interest in the property -- even known noisy neighbors.


Unfortunately, reliance upon this form as a conveyance of complete and accurate information is based upon two erroneous assumptions:

1.) That the property owner is willing to disclose all known defects;

2.) That the property owner is fully aware of conditions that warrant disclosure.

If a property owner is unwilling to disclose defects, they can be described as ethically compromised individuals who (regardless of apparent age) are overdue for parental or litigious spankings.

News: The second erroneous assumption refers to property owners who are honestly unaware or unsure of the conditions to be disclosed. This group includes nearly everyone who has ever sold a house. The primary reason for this universality is that all homes have at least one defect that is completely unknown to the owner. It might be faulty wiring in the breaker panel, a cracked framing member in the attic, a loose chimney fitting, a drain leak under the house, missing screws at flue pipe fittings, or a fire safety violation.

The list is actually endless and is the primary reason why home inspections, not TDS forms, are the essential avenue of disclosure of defects to prospective homebuyers.

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The one benefit of a TDS form is that it might contain information not likely to be discovered by a home inspector. For example, an honest seller might disclose an added bedroom was built without a permit; that the main sewer line becomes clogged with roots from time to time; or that flooding occurs in the basement every winter. Otherwise, most TDS forms provide little in the way of useful information.

Q: The house I'm buying had a previous purchase offer, but the deal fell through. When I asked my agent for a copy of the previous home inspection report, he said I was not entitled to a copy. How can they withhold this information?

A: The inspection report from the former transaction is the legal property of the previous buyers. Therefore, you might not be entitled to a physical copy. However, the agents, brokers and sellers are required to disclose every property defect of which they are aware. If they read the old inspection report, then every item in that report is part of their knowledge, and it is now their legal responsibility to disclose all of that information.

If they are not willing to do this, they are in violation of state disclosure laws. But regardless of what they do or do not disclose, be sure to hire you own home inspector -- the most qualified one you can find.

• Contact Barry Stone at www.housedetective.com.

© 2022, Action Coast Publishing

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