Home Sellers Must Comply With New Disclosure Requirements
By: MARK W. VYVYAN
Since January, sellers of Minnesota residential property have been required to disclose all known conditions of their home that could adversely and significantly affect an ordinary buyer’s use and enjoyment of the property or any intended use of the property of which the seller is aware. As discussed in the November 2002 issue of the Real Estate Focus, this new legislation significantly broadens the scope of home sellers’ disclosure requirements.
Home sellers are attempting to comply with the new disclosure law in ways that will not hinder the sale of their homes. Many have completed the new disclosure form created by the Minnesota Association of Realtors. While that form purports to comply with the new law, it, like any other form, is only as good as the person completing it. While the form calls for disclosures regarding the condition of numerous specific portions and features of the home, home sellers (and buyers) still need to consider whether there may be defects in areas not specifically listed in the form.
Some home sellers are also making use of exceptions to the disclosure requirements. For instance, the law provides that a home seller is not required to disclose information contained in a written report prepared by a qualified third-party (such as a home inspector) and provided to the prospective buyer prior to entering into a purchase agreement. In a departure from past practice, many home sellers are now obtaining a home inspection at the beginning of their marketing efforts to comply with the new disclosure requirements. Home sellers should be aware that if they have information that is not disclosed in the report or that contradicts the report, it must be disclosed to prospective buyers.
Some home sellers are requiring that prospective purchasers waive their rights under the new disclosure law. The law provides that the parties to a residential real estate transaction may waive the increased disclosure obligations, allowing sellers to sell property “as-is.”