[FONT=Tahoma][size=2]Does any one know of any other states that SPIS is mandatory .
New York state requires home sellers to disclose to prospective buyers any “material facts” that might affect a buyer’s decision on whether or not to buy a home.
This includes water or flooding that might have ever occurred.
Failing to disclose these things can carry serious consequences for the seller, and possibly for their real estate broker as well.
So if your house is on the market, or might be on a future date and you have suffered from water damage, make sure you understand what you need to disclose to your buyers.
Although New York maintains a “Caveat Emptor” setup, the state does require homeowners to fill out a Property Disclosure Form before closing.
If homeowners do not fill out this form, they will be required to credit buyers $500 upon closing.
Most attorneys will actually recommend sellers to give buyers the credit, since it might reduce their liability in the future—if a seller fills out the form and misses a defect, or does not describe one sufficiently enough, they may still be held liable for non-disclosure.
Since a seller often chooses to credit the buyer with $500 instead of filling out the disclosure, many feel they are free and do not need to disclose any issues.
This is not the case.
A Property Disclosure Form contains a laundry list of items ranging from structural defects to the type of wiring in the house.
It also includes plumbing and sewage issues, water leakage of any type, termites or other insect infestations, roof leaks and defects.
If a property has suffered from any structural hazards, the choice is not up to a home seller to disclose—law orders they must.
This includes letting a buyer know if a home is located in a flood plane, area of high risk for fire or earthquake fault zone, informing them if there are or were underground storage tanks on the property and researching the home’s proper zoning area.
To check and see if your home is located in a flood zone, you can click here and type in your address.
If a seller discloses a known defect and the buyer decides to continue with the purchase of the home, a seller cannot be held liable for future issues. On the other hand, if a seller does not disclose problems, they can be sued by the buyer after the defect is discovered.
They could even be held responsible for the costs of repairs and other damages resulting from the undisclosed defect.
Many buyers will also insist on a home inspection before agreeing to buy a home, and the inspection might reveal existing problems.
But such an inspection does not relieve a seller of their duty to disclose known issues.
A real estate agent or broker also has a duty to disclose “material facts” to potential buyers. If a seller tells their sales agent that the basement gets wet during a rain storm and the seller didn’t disclose it to the buyers, the agent has a duty to disclose it.
Thanks to Hurricane Irene, numerous homeowners saw their basements and garages flood. Even if just a little water came in, this will have to be disclosed to any future buyers.
In instances like the one we just had, where a hurricane came through with heavy downpours, it is understandable to have water leakage.
Repairing the damage as quickly as possible is essential.
If the damage is severe, ensure the issue is corrected appropriately, and by a professional. Later on, you do not want an issue with mold.
No matter what, do not try to hide the evidence.
Painting over a water leak will only hide it for a short amount of time.
Home inspectors have ways if detecting previous damage — light sensors, special cameras, etc. In addition, mold loves to grow in places where water once was, and it eats away at most porous materials (sheetrock, paneling, wood).
Once it starts to grow, what would have been an easy fix will now be a more complicated one.