Fess up about defects — It’s the law

 

Part 2 of Real estate the new pension plan

 

HONOLULU ADVERTISER August 21, 2005

BY LISA SCONTRAS

Custom Publishing Group

 

With the growth in the volume and complexity of real estate purchase documents, it is important to note that fallout from that trend includes a strong emphasis on seller disclosure.

 

While the concept of caveat emptor (buyer beware) is still good common-sense practice, with regard to real estate the onus has legally shifted from the buyer to the seller, making the seller responsible for disclosing known material defects.

 

According to the National Association of Realtors, failure to disclose material facts about a property is the leading cause of lawsuits filed against sellers and their real estate agents, making it more and more difficult for sellers to run for cover under the “I didn’t know” umbrella.

 

Natural or environmental hazards and material facts such as existing asbestos, lead paint, groundwater contamination, special tax or homeowners association assessments, leaks or flood zone designations are among the kinds of facts that need to be fully disclosed to the buyer.

 

Lawsuits where it is demonstrated that the sellers or agent knew or should have known about a defect of some sort are sometimes won with only circumstantial evidence.

 

The Honolulu Board of Realtors has a standard form to fill out. Sellers should spend the requisite time to fill it out accurately. A little extra time could conceivably save thousands of dollars in legal fees.

 

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