How To Look At A House

McGarry and Madsen's home inspection blog for buyers of  

site-built, mobile/manufactured and modular homes

Should I trust the Seller's Property Disclosure Statement?

Thursday, July 19, 2018

Under Florida law, as in many other states, a seller of a residential property has an obligation to disclose to the buyer all known facts that materially affect the value of the property being sold and are not readily observable. The Florida Association of Realtors has a standard property disclosure form that is provided to sellers as a convenient way to comply with the legal obligation of disclosure, and realtors encourage their sellers to use them. Completing the form is actually not a requirement, but deciding to not fill out and sign the form does not get a seller out of their obligation to disclose. Plus, it makes a buyer very suspicious of the property.

    “The number one reason for a lawsuit after a real estate transaction in Florida is lack of disclosure,” according to Gainesville realtor Chris Handy, of Bosshardt Realty, and selling the house with an “As Is” contract does not eliminate the disclosure requirement. But decisions by Florida courts have made it clear that the seller is not responsible for something they “should have known”; only for known defects and hazards that were not easily discernible and not disclosed.

    A recent case in the Tampa area, in which the seller received a settlement from their insurance company for repair of a sinkhole below their house (shown in the photo above), then made only cosmetic repairs to the home and sold it without telling the buyers about the sinkhole, has resulted in a criminal conviction in Federal Court for wire fraud. While the case highlights the possible legal consequences, it was an unusual situation because the lack of disclosure was so significant and easily proved. Most lawsuits are in civil court, and not that straightforward.

    Disclosure is often complicated by the fact that many sellers do not have first-hand knowledge about defects in a home because they have never occupied it. Banks selling a foreclosure, investors disposing of a rental property, and the children of deceased parents selling their retirement condo to settle the estate are three examples. Also, sometimes people just forget about problems that occurred years ago and are unaware of current defects in their home. For all of these reasons, realtors encourage buyers to get a home inspection. 

   Any professional home inspector will tell you that they are not going to find everything that is wrong with a house in a two to three-hour examination. But a home inspection provides the homebuyer with a good understanding of the overall condition of a house, and adds an additional layer of “disclosure” that is a sensible part of due diligence in buying a home.

    As an example, we inspected a home recently in a neighborhood known to have a high incidence of foundation problems due underlaying veins of clay soil. The buyer informed us that the seller’s disclosure stated that previous structural settlement/heaving had been repaired, but wanted a careful examination of the house anyway. An itemization of the work, including a diagram with the location of piers and total cost of the project was attached to the disclosure. 

    We always do a permit search in the public-access database of the local building department before each home inspection, and found it odd that there was no building permit for the extensive foundation work outlined in the documentation. Also, although there was plenty of cosmetic repair, clear evidence of further structural distress was still visible.

    Because of the concerns we raised, the buyer called the foundation repair company after our inspection to figure out what was going on. They advised him that the paperwork he had was only a proposal, and they had never done any work at the home.

    Also, see our blog posts What can I learn from talking with the seller? and What are the problems with buying a house sight unseen? and Do I have to bring my house up to code to sell it? and The seller gave me a report from a previous home inspection. Should I use it or get my own inspector? and How can homebuyers protect themselves against buying a house over a sinkhole?

• • • • • • • • • • • • • • • • • • • • • • • • • • • • 

  To learn more strategies for getting the best possible home inspection, here’s a few of our other blog posts:

How can I make sure I don't get screwed on my home inspection? 

What if my home inspector has already inspected the house recently for someone else?

How thorough is a home inspector required to be when inspecting a house?

Can I do my own home inspection?

    To read about issues related to homes of particular type or one built in a specific decade, visit one of these blog posts:

What are the common problems to look for when buying a 1940s house?

What are the common problems to look for when buying a 1950s house?

What are the common problems to look for when buying a 1960s house?

• What are the common problems to look for when buying a 1970s house?

What are the common problems to look for when buying a 1980s house?

What are the common problems to look for when buying a 1990s house?

What problems should I look for when buying a country house or rural property? 

What problems should I look for when buying a house that has been moved?

What problems should I look for when buying a house that has been vacant or abandoned?

What are the most common problems with older mobile homes?

What do I need to know about a condo inspection?

What are the "Aging In Place" features to look for when buying a retirement home?

   Visit our HOME INSPECTION page for other related blog posts on this subject, or go to the INDEX for a complete listing of all our articles.

Water Heaters

Water Heater Age

"What Are The

Signs Of..."

Septic Tank Systems

Structure and Rooms

Plumbing Pipes

Termites, Wood Rot

& Pests

Sinkholes

Stairs

When It First

Became Code

"Should I Buy A..."

Park Model Homes

Site

Shingle Roofs

Safety

Stucco

Remodeling

Wind Mitigation

Roof and Attic

"Does A Home

Inspector...?"

Pool and Spa

"What Is The Difference Between..."

Radon

Brick

Plumbing

Concrete and

Concrete Block

Metal Roofs

Foundations

Modular Homes

Rain Gutters

Mold, Lead & Other Contaminants

Condominiums

Older and

Historic Houses

Crawl Spaces

Mobile-Manufactured Homes

Building Permits

Life Expectancy

Clay Soil

Insurance

Floors

Insulation

Toilets

Exterior Walls

& Structures

Generators

Common Problems

HUD-Code for

Mobile Homes

Garages and Carports

Flat (Low Slope) Roofs

Electrical Panels

Sprinkler Systems

Electrical Receptacle Outlets

4-Point Inspections

Hurricane Resistance

Frequently Asked Questions (FAQ)

Home Inspection

Heating and Air Conditioning

Building Codes

Fireplaces and Chimneys

Inspector Licensing

& Standards

Energy Efficiency

Washers and Dryers

Electrical

Kitchens

Doors and Windows

(placeholder)

Cracks

Electrical Wiring

Click Below  

for Links

to Collections

of Blog Posts

by Subject

Plumbing Drains

and Traps

Appliances

Smoke & CO Alarms

Aging in Place

Top 5 results given instantly.

Click on magnifying glass

for all search results.

Bathrooms

Lighting

AFCI, CAFCI,

DFCI, & GFCI

Sinks

Air Conditioner & Furnace Age/Size

Attics

Electrical Switches

Siding

Search

This

Site

Water Intrusion

Electrical - Old

and Obsolete

(placeholder)

Foundation Certifications

Tiny Houses

About McGarry and Madsen

(placeholder)

Wells

Buying a home in North/Central Florida? Check our price for a  team inspection by two FL-licensed contractors and inspectors. Over 8,500 inspections completed in 20+ years. In a hurry? We will get it done for you.

Moisture Problems

Crawl Spaces

Bedrooms

Closets