Let the Seller Beware
Pennsylvania’s Real Estate Seller Disclosure Law requires a person who sells residential real estate to disclose material defects with the property known to him to a buyer. A form prepared by the State Real Estate Commission calls for disclosures respecting the seller’s expertise (or lack thereof) in the construction trades, the condition of the roof, basements/crawl spaces, insect infestation issues, structural problems, additions or structural changes, water and sewage systems, HVAC systems, electrical systems, equipment and appliances, soil and drainage issues, boundary issues, hazardous substances, and other legal issues affecting title to the property. The form is of the check-the-box variety and is often presented with very little instruction as a mere formality. Nothing could be farther from the truth.
The form presented to most sellers by a realtor is not a limitation on the type of problem which must be disclosed. In other words, just because a defective item is not included on the general form does not mean that it does not need to be disclosed. Furthermore, one who willfully or negligently fails to disclose a material defect is liable for the actual damages suffered by the buyer. Actual damages typically, but not always, translates to the cost of repair.
In addition to the actual damages permitted by the Seller Disclosure Law, a violation of the Seller Disclosure Law may also be a violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL). If found liable under the UTPCPL, a seller is subject to three times actual damages and the buyer’s attorneys’ fees. Attorneys’ fees in a failure to disclose case which goes to trial may exceed fifty thousand dollars.
Do you remember the leak you had under the bathroom sink last year? Perhaps your neighbor’s fence is on your side of the property line by an inch at the very back of the property, but you have an understanding. Have you ever performed a repair or improvement on your home without first confirming with your township or borough that you did not need to obtain a building permit? Ensuring that you properly disclose everything legally required of you is the best way to make sure that cashing the proceeds check after settlement is the last time you have to worry about that old house.