Property Disclosures – Who? What? When?

Property Disclosures – Who? What? When?

When selling your home, you are obligated, by law, to disclose certain information about your property. Most states require that all residential home sellers complete a written property disclosure form, but let’s take a look at Ohio’s laws in particular.

THE BASICS

Ohio law requires most residential home owners to complete a residential property disclosure form when listing the home for sale. This form consists of basic yes/no/unknown responses and it addresses material facts, major defects, special disclosures and federal disclosure. If you are a residential home seller, but the home sale you’re involved in falls into one of the following categories, you are not required to fill out a property disclosure form in Ohio:

• a forced sale, such as a foreclosure, bankruptcy, probate transaction, or eminent domain
• a transfer from one co-owner to another
• a transfer to someone who has lived in the property for the previous two years
• a family transaction, such as between spouses (including divorcing spouses), children, or parents, or
• a house that you own via inheritance but have not occupied within the last year.

MATERIAL FACTS

Ohio’s Property Disclosure form covers a variety of issues and items, to include the age of the property, it’s condition, known problems, and defects. As the seller, you are required to address all known defects, things that are reasonably apparent, to ensure you don’t knowingly hide a major defect. It is imperitive that you answer each question honestly, so as not to subject yourself to a possible lawsuit. We will discuss that a bit more later. Some of the areas addressed in Ohio’s form include: 

• water supply
• sewer system
• roof
• water leakage or accumulation problems
• foundation
• basement / crawl space
• floors
• interior and exterior walls
• termites and other wood-destroying insects
• electrical system
• plumbing
• heating
• air conditioning
• fireplace and chimney, and
• any built-in appliances, like a water softener, security system, microwave, or oven
• lead-based paint
• asbestos
• urea-formaldehyde foam insulation
• radon gas
• the existence of underground storage tanks or wells
• flood plains and erosion problems
• zoning violations or pending assessments, including fees or abatements
• homeowners’ association
• any oil, gas, or mineral right leases on the property
• abandoned underground mines (directing purchasers to the Ohio Department of Natural Resources for additional information)

The only time you do not need to disclose an issue on the property disclosure form, is when the problem is open to observation. An example would be a water stain on the ceiling that can be seen by anyone walking under it. However, this does not mean that you can try to conceal the issue or prevent the potential buyer from investigating further.

MAJOR/MATERIAL DEFECTS

All major/material defects MUST be disclosed. Material defects are the kinds of problems that may cause a buyer to not buy the property because of anticipated costs to repair or replace. For instance, fire or flood damage. They also include things that are potentially dangerous – contamination, loose boards, areas where people could fall and get hurt. If your home’s electrical system isn’t up to code, and you’re aware of this, it must be shared with potential buyers. The form also includes a “other” section, to ensure that you, as the seller, do not leave out any defects that don’t neatly fall into one of the categories on the form. Repairs you have completed, as well as improvements and upgrades, should be noted here.

FAILURE TO DISCLOSE

Ohio sellers can be held liable for failing to disclose a material defect. If the buyer can show that the seller knew about the existence of a defect, they can legally file a suit against the seller. For example, if a seller knew that whenever it rains, the basement quickly floods, but failed to disclose this information, the buyer who discovers this can potentially sue. Knowledge of this problem would likely be easy to prove based on evidence of past flooding, records from repair people who visited the house at the request of the previous owner, and so on.

When working with a real estate agent, they will provide you with a copy of Ohio’s Property Disclosure form to fill out. Your agent should be knowledgable on the state’s requirements and can answer any questions you might have, BUT he/she is not allowed to help you fill out the form in any way. It is your responsibility, as the seller, to answer each question honestly and fully.