Home Buyer Beware: When Home Sellers Don’t Disclose Property Information

I was having coffee with a friend when the subject of home property disclosures came up. This type of legal document can be a hassle for the home owner trying to sell their property and, in some cases, a deal breaker for the person(s) buying the property. In it, the home seller is prompted to disclose what they know about the property in advance of the sale. Home buyers may use the information to drive their negotiations or to alert their inspectors to specifically look for certain things. Some states, such as California, require very detailed explanations of the neighborhood as well.

The reason this topic came up was a sale that might become a rescinded sale. The seller in this particular instance knew in advance of a construction project next door (a demolition and a plan to rebuild apartments) and never mentioned it to the buyer. But the seller mentioned the reason for selling to another neighbor. The house was sold and the disclosure document had made no mention of this construction event next door. The new owners were made aware of the project when the builder asked permission to build a footing for the building that would have a sunken garage. That footing would be located beneath their home.

Is this a case of home buyer beware or a clear-cut case of failure to disclose?

Real estate brokers are not required to know the law and in most cases, we will recommend the party contact an attorney. In these types of situations, where hundreds of thousands of dollars may be involved, it is often surprising how few people will consult legal advice on the paperwork. And one of the most important documents a real estate lawyer will likely review is the property disclosure form.

Generally, disclosures cover known issues. But occasionally, almost always during the inspection, some problems the home owner was unaware of will crop up. They may not have been aware of a pest infestation for example. But the other, most commonly disclosed items should be made known and noted by the home owner.

If the home has plumbing or sewage issues, roofing problems or water leaks, foundation cracks, drainage concerns, or lead paint, these issues must all must be disclosed. Attempting to cosmetically hide these issues may make these problems disappear long enough to positively impact the sale. But the buyer may still have recourse.

Many of these problems can be resolved without going to court. Some, like the situation mentioned above, may take that path however. How the court rules could have negative consequences for the deal. For instance, if an amicable settlement can’t be reached, the court may instruct the seller to foot the bill for the repairs, force the seller to pay for the cost of taking the claim to court (including attorney’s fees), and in extreme cases such as the one above, rescind the sale (the court makes the former owner take the house back). It may even see something more criminal and suggest that the whole deal was fraudulent and if the intent to defraud it present, criminal action might be taken as well.

In the situation mentioned above, not only was the buyer not aware of the potential construction, which could last years, she is also asthmatic. What appeared to be a good deal at the time, the perfect house so to speak at an incredible price was actually a home priced to sell for an undisclosed reason. Fortunately this situation is an outlier and not the norm.

Disclosure documents should be treated with a great deal of importance. The Jones Group @ Sunriver Realty has decades of experience in Central Oregon property sales. Let us help you sell your home or buy the home of your dreams.

How can we assist you today?


On behalf of The Jones Group @ Sunriver Realty

Nola Horton-Jones, Principal Broker/Realtor | ABR, C-RIS, e-PRO, GREEN, RSPS, CCIM Candidate

Bryce Jones, Broker/Realtor | ABR, CRS, e-PRO, GREEN, GRI, RSPS, SFR

The Jones Group @ Sunriver Realty | 57057 Beaver Drive | Sunriver, OR 97707

Mobile: 541-420- 3725 | Mobile: 541-420- 4018 | Fax: 541-593- 5123



Licensed in Oregon