Buying or Selling Property?
WHAT YOU NEED TO KNOW ABOUT THE PENNSYLVANIA REAL ESTATE SELLER DISCLOSURE LAW
What is the Law?
The Pennsylvania Real Estate Seller Disclosure Law requires that a seller of residential property provide a signed and dated copy of a property disclosure form, that covers specific topics relating to the condition of the property, to a prospective buyer, prior to the signing of an agreement of sale.
This Law requires that a seller disclose to a buyer any material defects with the property known to the seller. A “material defect” is a problem with the property that would have a significant adverse impact on the value of the property or that involves an unreasonable risk to people on the property. Any seller who fails to disclose a known material defect, by either misstatement or omission, permits a buyer to recover actual damages caused by violation of this Law.
What is a Seller Required to Disclose?
A seller is not required to inspect or investigate the property for the benefit of the buyer, but is required to disclose any material defects that he/she knows or has reason to know affects the property. This duty continues throughout the sales transaction, so if any information contained in the Disclosure Statement is later is found to be inaccurate, the seller is obligated to notify the buyer of the inaccuracy.
A seller is not liable for error, inaccuracy or omission of information regarding a material defect of the property if they had no knowledge of it or if they reasonably believed that the defect had been corrected. Sellers may be protected from liability if they relied on information provided by certified licensed professionals such as a home inspector, contractor or public agency if that information is within that expert’s field.
What is a Real Estate Agent Required to Disclose?
A real estate agent also has a duty under this Law. An agent is required to disclose to a buyer any material defect of which the agent has actual knowledge, that was not disclosed to the buyer. The agent is not required to conduct an independent inspection of the property for the benefit of buyer, but will have liability under this Law if he/she has actual knowledge of a material defect that was not disclosed by the seller or was otherwise misrepresented on the Disclosure Statement.
Additionally, an agent representing a seller must advise the seller of his/her responsibility to disclose material defects as outlined by the Law and must provide the seller with a property disclosure form to be completed by the seller and to produce the completed form to a buyer or the buyer’s agent.
What Specific Information Must be Disclosed?
Specific information relating to the following areas of the property are required to be disclosed:
- Seller’s expertise in contracting, engineering, architecture or other areas related to the construction and conditions of the property and its improvements
- When the property was last occupied by the seller
- Basements and crawl spaces
- Termites/wood destroying insects, dry rot and pests
- Structural problems
- Additions, remodeling and structural changes to the property
- Water and sewage systems or service
- Plumbing system
- Heating and air conditioning
- Electrical system
- Other equipment and appliances included in the sale
- Soils, drainage, boundaries and sinkholes
- Presence of hazardous substances
- Condominiums and other homeowner’s associations
- Legal issues affecting title or that would interfere with use and enjoyment of the property
- Condition, if known, and location of all storm water
What about Defects that Develop Later?
A seller or a real estate agent are not subject to liability for damages relating to disclosed material defects or material defects that develop after the closing.
Filing a Claim
There are common law and statutory claims for relief that may be filed by a buyer who finds a material defect with a property that was recently purchased and who has reason to believe the problem existed prior to taking ownership and the seller failed to disclose it. A buyer may present a claim under the Pennsylvania Real Estate Seller Disclosure Law, 68 Pa.C.S. §§7501, up to two years from the date of closing. A claim may be provable through information gained from neighbors, utility bills, former Disclosure Statements, failed sales inspection reports, HO warranty claims, and/or insurance claims. It’s important to discuss your concerns with your real estate lawyer before you move forward.
A seller who is contacted regarding a claim on a property that was recently sold, should discuss the matter with a real estate lawyer as soon as possible to avoid potential liability for damages.
Krista Kochosky leads the Real Estate Group at The Lynch Law Group. For more information on the Pennsylvania Real Estate Seller Disclosure Law or other real estate matters, contact her at email@example.com or (724) 776-8000.