When you sell a home, it’s important to protect yourself against lawsuits from your home buyer. Recently, we’ve seen a number of cases where buyers are suing their sellers years after the home was purchased. In Oklahoma, the Residential Property Disclosure Act has been in place since 1995. This essentially means that sellers need to inform buyers of any defects in the home that they are aware of. If you are not careful when selling your home, buyers can use the Oklahoma Residential Property Disclosure Act years later to bring a lawsuit against you.
How does the Residential Property Disclosure Act work?
When selling a home, the seller is required to present one of two statements to the buyer. Depending on the situation, they will either need to submit a property disclaimer statement or a property condition disclosure statement. A disclaimer statement is only applicable if the seller has never lived in the home and is unaware of any property defects. Disclosure statements are much more common, and they are used in two different situations. They are used if the seller has lived in the home previously, or if they have never lived in the house but are aware of potential defects. These statements can be complicated, which is why it’s best to hire a lawyer for Oklahoma real estate defense to help you if you don’t have legal experience.
The disclosure statement will then inform the buyer of the home’s defects. There is a standard form that sellers can fill out to address these issues. The disclosure statement will address the following problems:
- Problems with the plumbing, air conditioning, heating, or electrical systems
- Water damage or issues with the water and sewage systems
- Damage from natural disasters, such as a fire or tornado
- Problems with the structure of the building, such as the floors, walls, roof, or foundation
- Any infestations or presence of wood-damaging insects
- Presence of hazardous materials
- Problems or conflicts with land use
- Prior manufacturing of methamphetamines in the house
- Any other issues the seller is aware of
You will be required to address these issues in your disclosure statement. The disclosure statement needs to be delivered to the potential buyer as soon as possible, and it should be produced before the seller accepts an offer from the buyer. If the disclaimer statement is delivered after the buyer has made an offer on the property, the offer should only be accepted after the buyer has read and legally acknowledged the disclaimer statement. You cannot complete a disclaimer statement for more than 180 days before delivering it to the potential buyer. If you become newly aware of a defect with the property after delivering your disclaimer statement but before the purchase is complete, you will need to fill out and deliver another disclosure statement addressing these defects.
Why do you need a lawyer to assist with your disclosure statements?
There are instances where a buyer may find a loophole in your disclosure statement and file a lawsuit against you. For example, a buyer could damage the pipes themselves during remodeling, but claim that the damage was due to a pipe defect that you failed to report. These lawsuits are particularly common in situations where the seller is a real estate investor who has never lived in the home itself. They may never have received a disclosure statement from the property’s previous owners or any previous rental tenants, making it difficult to accurately report the condition of the home.
If your buyer files a nondisclosure claim, which essentially states that they did not receive adequate disclosure of the home’s condition, then it leaves room for a number of other legal disputes. Many buyers will include a wide range of problems with the property in their claim in an attempt to increase their chances of winning the dispute. They may also challenge the legality of any work that has been done on the house and whether it has been completed by a licensed contractor. These disputes can be lengthy and expensive. In order for these nondisclosure claims to be successful, The buyers need to prove that they should have been informed but that they had no knowledge of the defect before making the purchase. If the buyer wins the lawsuit the seller made be made to pay damages and the seller’s legal fees. A one-hour legal consultation may save all this headache and expense.
To prevent these problems, it’s important to always disclose every defect you are aware of with the home. Yes, this may mean it lowers the sale price of the house slightly, but it also means you won’t get caught in an expensive legal dispute later on. For every property you own, you should also keep a record of defects, repairs, and upgrades, so that it’s easy to disclose the home’s condition to a potential buyer. These records can also help your legal case if the buyer ever decides to file an unfair legal suit.
Since disclosure statements can be very complex, it’s important to hire a lawyer when selling your home. There are so many potential defects that need to be addressed, and it’s easy for things to slip through the cracks by accident. An Oklahoma real estate attorney will be your best ally in preventing unfair nondisclosure suits. Contact Giles Law today to set up a consultation with one of our expert attorneys.