What Must a Seller Disclose About Property Defects?
June 16, 2022
There is a saying that you get what you paid for. When buying residential real estate, you need to know what you are getting first, which is why Washington law requires sellers to disclose certain information to prospective buyers in transactions.
This requirement is designed to promote transparency and fairness in such matters. Because these disclosures are required by law, sellers can find themselves in trouble if they fail to comply.
At Curiale Hostnik PLLC, we represent residential real estate buyers and sellers in Tacoma, Washington, and in the Pierce County communities of Puyallup, Lakewood, Gig Harbor, Lakewood, and University Place. We help sellers understand and comply with disclosure laws. We also help buyers seek legal remedies if what they purchased is indeed not what they were led to believe they were paying for.
What Are the Disclosure Requirements in Washington?
Sellers of residential real estate in Washington are required to disclose material facts about their property. Material facts include any information which could affect a buyer’s decision to purchase the real property and the price the buyer is willing to pay for the property.
Disclosing material facts includes completing and attesting to the truthfulness of the information provided in the Residential Real Property Disclosure Statement form. The seller must disclose information pertaining to:
The title and ownership of the property;
Water, sewage, plumbing, electrical, and safety systems;
The age and defects of structures;
Environmental issues regarding flooding, drainage, and contamination;
Specific information about manufactured and mobile homes; and,
Information about home ownership association (HOA) fees, requirements, and agreements.
There is also a general provision for full disclosure by the seller of any defect not included specifically on the disclosure form.
The residential properties that fall under Washington’s requirements are those parcels of land with four dwellings or fewer or if the land is zoned residential, even if it has no dwellings on it. Commercial real estate disclosure requirements are a separate matter, not subject to these rules.
Moreover, if the real property is a gift or the subject of marital property division in a divorce, is being sold by an estate representative or bankruptcy trustee, or is being sold to a buyer who already has some ownership interest in the property, these seller disclosures are not required.
How Is a Transfer Disclosure Statement Handled?
The disclosure statement must be submitted within five days of both parties’ signing of the purchase agreement, although the disclosure itself is not part of the formal purchase agreement. The buyer has three days from receipt of the disclosure to rescind the purchase agreement should the buyer find something in the disclosure that makes them want to walk away from the purchase.
Until the sale is closed, the seller has a legal obligation to ensure the accuracy of the disclosure. That means that should anything occur with the property that renders the disclosure inaccurate, such as a sewer line breakage or change in the HOA agreement, the disclosure must be updated.
What Legal Remedies Do I Have if the Seller Concealed Defects?
If the buyer later discovers defects concealed by the seller, there are legal remedies they can pursue. Different defects have unique statutes of limitation for legal remedy under the law, so it is wise to contact a real estate attorney as soon as you discover a concealed defect.
Upon discovery of the defect, you have a legal obligation to mitigate it immediately to limit further damage. For example, if the sewer line is broken, you must pay to have it repaired right away so it does not continue to leak. You must immediately contact your property insurance company about any defects and if applicable, the HOA.
The initial attempt to recover damages caused by the defect should be submission of a demand letter to the seller. If the seller refuses to compensate you fairly, you can sue them for failure to disclose material facts. In court, you bear the burden of proving that the seller concealed the defect intentionally. This often requires use of experts to inspect the defect and provide testimony regarding concealment.
Moreover, if you can prove the seller’s agent was complicit in the concealment, the agent and brokerage may also be named as defendants in the lawsuit. In some cases, home inspectors may have some legal exposure for not revealing a defect subject to disclosure.
Among the damages you can recover are the expenses you incurred to repair defects and for additional inspections, as well as attorney’s fees and case expenses you paid to pursue the lawsuit. Your attorney may be able to pursue other unique damages, depending on the situation. In rare cases, the court may agree to rescind the entire purchase of the property.
How Curiale Hostnik PLLC Can Help
Real estate law is a highly-specific area of practice. If you’re a seller facing a demand or lawsuit from a buyer, or if you’re a buyer wanting to pursue legal remedy for a seller’s failure to disclose, Curiale Hostnik PLLC has the experience and knowledge to help. We know real estate law.
If the residential real estate is in Tacoma, Washington, or anywhere in Pierce County, call Curiale Hostnik PLLC right now.