Real estate disclosures are one of those things that aren’t necessarily exciting to deal with during a transaction, but are vitally important regardless of which side of the deal you are on. In Pennsylvania, there are several types of disclosures that are required, and a few that aren’t, but are worth mentioning so you are aware of them.
First, I think it’s important to define the different types of defects:
- A patent defect is considered something that could have been found during a buyer’s thorough inspection of the property, and typically the buyer would not be able to pursue a claim against a seller for not disclosing this type of defect.
- A material defect is one that could significantly impact the value of a home or could cause unreasonable risk to someone on the property. These defects must be disclosed by a seller if they are aware of them, or a buyer could pursue a claim from any associated damages that would later occur. This is why real estate agents should always encourage sellers to make sure that they are completing these required disclosure forms truthfully and to the best of their knowledge, as to prevent any issues coming up from willfully misrepresenting the condition of the property they are selling.
PA’s Required Disclosures
- One of the larger required disclosure documents in the Seller’s Property Disclosure Statement. This form is a 9-page document that sellers complete prior to putting their home up for sale, and it details any problems that they are aware of with most of the major components of a house or property. Topics that are covered include any remodeling done to the home, any repairs or issues with various parts, such as the roof, basement, or other structural items, and information about the electric, water, and heat, and age of those respective systems. This form is also where sellers can disclose any known issues with the property, such as with flooding, boundaries, hazardous or environmental issues. Remember, sellers legally need to disclose any material defects that they are aware of. There are certain instances when these disclosures do not need to be made, but for your typical single-family residential home sale, this form is definitely needed!
- The next required disclosure is the Coal, Oil, Gas, and/or Mineral Rights Disclosure Statement, which gives the seller the opportunity to let the buyer know if they have any of these rights, and if they do, what their intentions are with them. Sometimes sellers decide to keep those rights and not transfer them with the sale, or may transfer them separately from the sale of the property.
- The last of the required disclosures is the Lead-Based Paint Hazards form, but this one is only required for homes built prior to 1978. This form gives sellers the chance to disclose if they are aware of lead-based paint used in the home, or if they have had any previous testing done to determine the use of it. For those of you selling a house built after 1978 – you get out of this one!
Disclosures Not Required to be Made in PA
- Pennsylvania’s “Megan’s Law” – Agents/brokers are exempt from disclosing any information regarding a sexually violent predator; however, as an agent, I strongly recommend that sellers disclose the presence of any sexually violent predators they are aware of. Also, if I represent you as a buyer’s agent and am aware of this information, I have a responsibility to inform you of that knowledge. That being said, agents do not research this information themselves, but encourage buyers to if it is something they are concerned about.
- Stigmatized Properties – The PA Supreme Court ruled in 2014 that purely psychological stigmas are not material defects that a seller has to tell a buyer about. These types of psychological stigmas include the occurrence of murder, suicide, home invasions, etc. If a buyer is concerned about any of these things, I encourage them to ask questions directly to the seller, and in turn, the seller should answer or indicate that they are unwilling to answer. Buyers can also investigate through local newspapers or police, or by asking any neighbors who might have some knowledge.
All of these disclosure forms can have such valuable information in them that buyers would want to be aware of before making the decision to move forward with purchasing a home; however, as a real estate agent, I always encourage buyers to do their due diligence to make sure the property is in a condition that they are happy with and to obtain additional inspections on the property that can inform them of any other potential issues or repairs needed, and I’m always able to provide buyers with a list of certified home inspectors that can help with this process.
Regardless of which side of the real estate transaction you are one, knowing the ins and outs of these forms and processes is one of the (many!) reasons why having a REALTOR® working with you is so important!