Clarifying the essence of real estate disclosure

Q: As a veteran Realtor, I'm writing to disagree with the advice you gave in one of your past columns. You said sellers should provide additional information to buyers if they believe the home inspection report is incomplete or incorrect. This is very misleading to your readers.

There's nothing in the disclosure law or in the disclosure forms that compels sellers to double-check or amend the disclosures in the home inspector's report. How can a seller know more than a home inspector about property defects? And since when are sellers expected to review and correct the findings of a home inspector?

This kind of misinformation can create confusion in real estate transactions and may increase liability for everyone involved. Don't you think this warrants reconsideration?

A: You seem to have gathered more from my article than was intended or implied. By no means are sellers required to scrutinize the accuracy or thoroughness of a home inspection report, or to amend a home inspector's findings. However, this does not excuse sellers from speaking up when an obvious oversight or inaccuracy in the inspection report is discovered.

Real estate disclosure is a mine field of liability upon which sellers, agents and home inspectors must cautiously tread, and the letter of the disclosure law is not always the first and last word of prudent direction.

Transfer disclosure laws consist of complex, legalistic verbiage, but their intent is simple. Sellers and agents must disclose whatever they know that could be of concern to a buyer. That's it. We can parse the finer points of legalese and whatever loopholes might be found, but what truly matters is that no significant information about the property be withheld by anyone. If the sellers read the home inspection report and realize the inspector has incorrectly reported a condition, should they say nothing? If so, what happens when the buyers discover the truth after the close of escrow? If a lawsuit ensues, are the sellers absolved of responsibility because they were not obligated to critique the inspection report?

The essence of real estate disclosure is open honesty and avoidance of liability. Every real estate professional should know this. Articles on disclosure liability abound, particularly in professional real estate journals. Seminars on disclosure procedures are featured at nearly all real estate conventions. It therefore behooves all agents and brokers to do whatever is reasonable and prudent to minimize the likelihood of legal encounters after transactions have closed. This, of course, includes the counseling of sellers to disclose to the max, without reservation.

In today's real estate environment, as in most fields of business, everyone is subject to potential assault by litigious attorneys. If that were not so, the real estate purchase contract would still be a one page construct, and there would be no need for transfer disclosure laws or home inspectors to amplify the disclosure process.

• Email questions to barry@housedetective.com.

© 2023, Action Coast Publishing