Seller Not Liable if They Don’t Disclose Problem, but Someone Else Does

Westcoe Realtors, Riverside Ca…Today’s topic comes to us right from the pages of almost any real estate transaction, and we’ll give you the moral to this story up front…It’s not who discloses a problem that is important…only that someone discloses.

First, understand that the law when it comes to a seller’s obligation to disclose property problems to a buyer is very clear…the seller MUST tell the buyer whatever they know to be wrong/not working with the home as soon as possible. By law, the seller must provide the buyer with a Transfer Disclosure Statement (TDS), and this disclosure is usually given to the buyer right after the buyer’s offer is accepted. They buyer then looks this disclosure over, and has the right to check out any problem noted by the seller. The buyer can call a plumber, a roofer, an electrician, etc. to discover the extent of the problem, and then together, the buyer and seller figure out how they will resolve said problem. The options are for the seller to fix the problem, for the buyer to accept the problem, or something in between. What is important here is that the buyer is made aware of the problem. Negotiating the solution is up to the buyer and seller.

However, what happens when there is a problem of which the seller is unaware? What then?

Well, this is why there are professional home inspectors. For a fee (almost always paid by the buyer), a home inspector will come and totally inspect the home from top to bottom, and then file a report for the buyer to review. Perhaps there is an outlet in a spare bedroom that does not work, or a small plumbing leak in a spare bathroom, etc. These are items that the seller was not aware of, but once the buyer is put on alert by the home inspector, then the options for the buyer are the same as above….negotiate the solution with the seller.

But wait, there’s more. What if a problem is missed by the seller, missed by the home inspector, but perhaps is mentioned to the new buyer by a neighbor? What then?

Same as above. Perhaps the seller’s chimney throws off a lot of sparks when they have a fire (seller doesn’t know this, and the home inspector wouldn’t know this either) and the neighbor has noticed it. Or perhaps another neighbors dog bark incessantly all day, but since the seller works all day, they are unaware of the problem. There are a multitude of problems that might fall into this category.

The bottom line here is that if the buyer is notified of the problem before the close of escrow, it doesn’t matter from what source they discover the problem-the seller, the home inspector, or the neighbor. The idea here is for a buyer to make and informed decision on the property, no matter where they get their information.

We say this because sometimes a buyer will “go crazy” thinking the seller is hiding something from their disclosures when another source finds a problem, when in reality, perhaps the seller simply didn’t know…or maybe the seller really did try to hide something. The bottom line is the same…the buyer found out some way, and now has the option to act to protect themselves from the problem. Yes, a seller who deliberately fails to disclose a problem may give a buyer a legitimate reason to question everything else from the seller, but it really does not matter who discloses…only that everything ultimately gets disclosed to the buyer before they close escrow.

So…while it’s best all disclosures about a home come from the seller, in the end, if issues are discovered by the home inspector, the neighbor, or the family dog, it only matters that the buyer is made aware so they can figure out what to do about said problem.

Take care, and we hope this helps you in your real estate travels down the road.

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