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Compliance with Seller Disclosure Obligations in Real Estate

Accurate disclosure of defects in a property is a crucial part of any real estate transaction. Sellers are legally required to disclose any material defects known to them. However, the situation becomes complicated when a seller is unaware of a hidden defect. Let's look at a case study.

1. The Plumbing Defect Question

Let's imagine that a seller is questioned about the existence of known defects in the plumbing of his property. In response, the seller declares that, to the best of her knowledge and belief, there are no plumbing defects. However, what she doesn't know is that the pipes are corroded and require replacement.

2. Breach of Disclosure Obligations?

In this situation, the key question is whether the seller is breaching its disclosure responsibilities. The answer is no. Since the seller has no knowledge of the plumbing problem, she cannot be held responsible for not disclosing the material defect.

3. After-sales Responsibility

Importantly, once the sale is completed, any issues that arise are not the responsibility of the seller and do not constitute a legal basis for the buyer to file a lawsuit. However, determining exactly when a problem started and when the seller “knew” it is not always clear.

In this particular case, the seller was not aware of the plumbing problem, which means she is not responsible for not disclosing the material defect. Real estate law tends to favor full and accurate disclosure, but also takes into account a lack of genuine knowledge on the part of the seller.

In summary, in real estate transactions, accurate disclosure is essential, but the seller's lack of genuine knowledge of a defect may exempt the seller from liability for failing to disclose the defect.

Legal and Tax Disclaimer

Please be advised that the content presented in this blog is for informational purposes only and should not be construed as legal or tax advice. The articles and information provided here are written from the perspective of a real estate agent affiliated with Keller Williams, and do not represent legal or tax counsel.

As the author, I am a licensed real estate professional under Keller Williams, holding Brokerage DRE License Number: #02197031. However, it is important to note that my expertise is in the field of real estate, and not in legal or tax matters. The insights and opinions shared on this blog are based on my experiences and knowledge in the real estate industry and should be treated as general guidance rather than definitive legal or tax advice.

For specific legal or tax concerns relating to any real estate transactions or investments, readers are strongly encouraged to consult with a qualified attorney or tax advisor who can provide tailored advice based on your individual circumstances and the latest legal and regulatory requirements.

The information on this blog is provided "as is" without warranty of any kind, and I, along with Keller Williams and its affiliates, disclaim all liability for any loss, damage, or misunderstanding arising from reliance on the information contained herein.

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