What Does a Seller’s Disclosure Notice NOT Tell You About the Property? September 25, 2015

By Don White 
Board Certified by the Texas Board of Legal Specialization in both Commercial and Residential Real Estate Law

When a Seller offers a home for sale, they are required under the Contract to provide the buyer with a Seller’s Disclosure Notice. This Notice is a disclosure of the Seller’s knowledge of any areas that have defects within the property. This provides valuable information to a Buyer to determine whether they should purchase the property, or what price they should pay for the property after considering everything that was disclosed.

The first paragraph of the Seller’s Disclosure Notice has the following language in all capital letters:

THIS NOTICE IS A DISCLOSURE OF SELLER’S KNOWLEDGE OF THE CONDITION OF THE PROPERTY AS OF THE DATE SIGNED BY SELLER AND IS NOT A SUBSTITUTE FOR ANY INSPECTIONS OR WARRANTIES THE PURCHASER MAY WISH TO OBTAIN. IT IS NOT A WARRANTY OF ANY KIND BY SELLER OR SELLER’S AGENTS.

However, in my experience of representing Buyers and Sellers over the years, most Buyers do not read that paragraph, and they assume that if the Seller marks that they are unaware of a certain condition, then the condition is not present.

However, a Seller’s Disclosure Notice DOES NOT tell a Buyer everything that is wrong with the Property. This is a surprise to most people. When you consider it is only a disclosure of the Seller’s knowledge, unless the Seller has X-ray vision or is a home builder or other similar trade, most Seller’s are not going to know everything that is wrong with the home.

An easy example is where the Seller marks “N” (for unaware) on the question as to whether there are any active termites in the home.   The Seller may not be aware of any active termites, but that does not mean they are not there. The termites can be hidden in the walls, and unless you have experience in finding them, can be impossible to detect.

Another easy example is the question that asks if the Seller is aware of any aluminum wiring in the home. Unless the Seller is an electrician, or has worked on the electrical in some form, the Seller will not generally know if there is any aluminum wiring in the home. So in that case they would truthfully mark “N” for not aware. However, a Buyer cannot assume that answer means there is no aluminum wiring in the home.

So keep these examples in mind next time you are purchasing a home. It also would not hurt to have an attorney involved at the very beginning. I often see cases that if I had just been in the picture PRIOR to the purchase, I could have saved the Buyer a lot of heartache and expense.

If you would like more information on Real Estate law, or to have your disclosures and contracts reviewed, please contact us here or call (940) 387-3518.

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