By Jacqueline Beardsley
The Importance of Disclosing!
Violation of Real Property Disclosure-
What is the Real Property Disclosure Report and what happens if information given on that report may not be truthful?
Simply put, the purpose of the report is to provide buyers with information about material defects in the property.
An example of a material defect would be water damage that was caused by a leak. That is what this true Case Study is about. I read about this Case Study in the Illinois REALTORS® legal hot topics.
In 2016 a Buyer purchased a home and close to a month later, water entered into the basement, bedrooms and interior of the house caused by a heavy rain. The Buyer investigated the situation.
The new owner found undisclosed water damage , watermarks on drywall and the framing, mold behind drywall in the basement, rotted studs and plywood.
The Buyer sued the Seller, alleging common-law fraud and the violation of the Residential Real Property Disclosure Act. On the report the former owner stated he was unaware of any flooding or recurring leakage problems in the crawl space or basement; material defects in the basement or foundation; also material defect in the walls, windows, doors or floors.
At the trial, former owner testified he was the general contractor when the house was built.
In 2011-2012 he said he'd repaired rotted wood under the deck and patched up drywall in the basement after an accident caused damage to the drywall.
After the parties gave testimony, the review of testimonies, evidence, and testimony by contractors and a structural engineer, the trial court ruled in favor of the plaintiff. It noted, defendant should have been placed on notice that there was a water issue inside of the wall when the drywall had been replaced.
The court felt it unreasonable to suggest repairs previous owner had done resolved the water issue.
The problem had not been eliminated. Repairs were cosmetic.
The defendant appealed but the Appellate Court disagreed.
My thoughts on this Case Study is that sellers know their home. Sometimes we don't have any idea what a previous owner may have or not have done with that home just as it is when we buy a used vehicle. That's different. The seller admitted that he had indeed replaced drywall so he should have seen the water damage that was under that drywall.
There is no reason at all to not disclose on a Sellers Report. LET THE BUYERS DECIDE WHAT THEY WANT TO DO WITH THE INFORMATION!!! If they know about something and want to resolve it or ask for seller contributions to fix issues such as foundations, etc. or renegotiate the price to reflect cost of repairs needed, they will do so.
So seller, WHEN IN DOUBT SPELL IT OUT!
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