4 Practical Points for Real Estate Agents

Practical Point 1: Old Inspection Reports

It is a good practice for listing agents to ask their sellers if they have old inspection reports (for example the reports they got when purchasing the property) and disclose them to buyers. While they may be mostly outdated, they may have some issues that were not repaired or issues that may result in later problems. The outdated reports rarely hurt the sale, but there may be a non-disclosure claim if the buyers later get a copy of an old report with some currently valid information or information that would have led them to a current issue. The Transfer Disclosure Statement has a place in section I to list such reports.

Practical Point 2: Problems the seller thinks have been repaired

Just because the seller paid a contractor to fix a problem does not mean the problem is completely fixed. For example, roof repairs may have been repaired, but a rainstorm from a different direction or intensity can bring new leaks. While the seller may have some defenses, it is a good practice to describe the old problem and give the name and contact information of the contractor paid to fix it. Buyers usually see this information as evidence that the seller properly maintained the property and like the idea of knowing who can be called to fix other problems.

Practical Point 3: Old construction defect lawsuits

There is no time limit that protects you if you do not disclose an old construction defect lawsuit. Moreover, attorneys often do a more than thorough job of describing construction issues and potential issues in complaints. Often there is a settlement that does not provide funds to correct all of the alleged problems and potential issues described in the complainant and they are never repaired. It is better to disclose the old lawsuit and recommend the buyer have their attorney review it.

Practical Point 4: Sellers who are exempt from using the Transfer Disclosure Statement form

Even if a seller such as a trustee is exempt from the TDS requirement, the seller must still disclose what they know. It is a good idea for the trustee to review a Seller Property Questionnaire (CAR form SPQ) to help remember what they may know. Also, even if a seller is exempt from the TDS requirement, real estate agents must still make a reasonably competent and diligent visual inspection and report what they find on an AVID form.