Disclosure: What the seller DOESN’T have to tell you in Georgia

disclosureWhat is Disclosure?

First of all, a disclosure is a part of the purchase and sale contract that gives the Seller the chance to tell you about any defects he may know about his property. Why would he ever want to do that? Well, because it’s the law. It’s illegal for the seller to hide defects from the buyer. Yet there are some things that the seller doesn’t have to tell you, some things that you may really want to know.

Do you have to tell if you have ghosts in the attic?

Well, I will start with the silly stuff, like is the house haunted? That’s a grey area in disclosure. The courts tend to rule that if the buyer thinks that something is detrimental then it is detrimental. Yet what if the rumor is that the house is haunted but the seller doesn’t believe it? Is he still required to tell you a story he doesn’t believe at all? It would be like me telling you that there was something wrong with the house because it was built while Mercury was in retrograde, if I don’t believe in astrology. There was a case in New York where a seller was sued for not revealing that the house was haunted, and lost. Part of the case hinged on the fact that the seller published a story in Reader’s Digest about the haunted house, so that proved that the seller believed it.

How about a grisly crime, do you have to tell?

But if you take it a little further, there is something a little more serious that the Seller is not required to tell you in Georgia. That is if the home “was the site of a homicide or other felony (including rape) or the site of a suicide.” The argument behind this rule is that these types of events do not affect the physical condition of the property. The effect is more psychological. But here is the twist: The Seller or the listing agent does not have to reveal the information, but if the seller or the agent knows about such information, and is asked, he (or she) is required to answer truthfully. This is an important point. They are not required to reveal the information but are required to answer truthfully if asked.

What if there was a diseased person living in the house?

What else does the seller not have to tell you? Well if the home was occupied by someone with a disease “which has been determined by medical evidence as being highly unlikely to be transmitted through the occupancy of a dwelling” which includes aids, the seller or agent is not required to tell you about that either. Here is another twist: They are not allowed to tell you if the house was occupied by someone with aids. It falls within the jurisdiction of fair housing law, since aids has been ruled to be a handicap. How do they answer? They should tell you that they are not allowed to answer that question.

How about criminal activity in the neighborhood?

It goes on…. What about sexual predators or pedophiles in the neighborhood? The lawyers that write the Realtor’s contracts in Georgia have actually added a paragraph warning the buyers that if they have concerns they have to go to the website and do their own research. If the seller doesn’t have to tell you about felonies committed in their own house they definitely don’t have to tell you about felonies committed by their neighbors in other parts of the world.

What does this mean to you, the prospective buyer?

What does this mean to the buyer? Do your own research. Call the local precinct and get the crime records for the area. Go to the web and search the sexual predator database. Talk to the neighbors. Find out if there are ghosts, noisy neighbors or suspected drug dealers on the street. Don’t wait until after you close on the house to find out why you might not want it!

Dan Connolly

Comments

  1. Josiah says

    I recently sold my home. I had a small picture placed over a bathtub drain access hole. We left the picture on the wall and didn’t think twice about it. The buyer now is trying to come back and get me to fix the hole with some outrageous repair. Does he have a leg to stand on? He had a home inspection and a pre-closing walk-through. Our disclosure form stated nothing about access holes. We were not hiding a hole, just used the small picture as an access panel.

    • Dan Connolly says

      I am not really sure what a bathtub drain access hole is. How big is it? Really hard to give you an answer without more data.

      • Josiah says

        It is a hole in an adjacent wall to the bathtub that allows for access incase the drain clogs or you lose jewelry into the trap. It is about 12″ x 6″.

  2. Sandy Brookover says

    I reside in KY and purchased a condo in GA as an investment property planning to retire and move this summer. The disclosure stated the condo had a heat pump. I paid for an inspector to inspect the property before I closed. Also, the seller paid for a year warranty. My daughter and granddaughter moved into the unit 2 months ago. It did not have any heat. We contacted the warranty company who sent two separate technicians to the condo. The first man put freeon in and left. Still no heat. The second technician repaired the unit and reported that this unit was NOT A HEAT PUMP. He also reported the unit was not covered under warranty because the problems began long ago. What I have is a central heat and air system. It costs $600 to repair. I contacted the inspector and the seller. The inspector apologized for his mistake for thinking it was a heat pump and returned my money. The seller is refusing to reimburse the $600 and said she thought the unit was a heat pump. Do I have a fraudulent claim? I purchased the unit at the price I did because I knew a heat pump was reliable!!!!! By the way, I still have not seen the condo……

    • Dan Connolly says

      Well I would start with the warranty company. Sometimes if you push back you can get things repaired that the technicians start out saying are not covered. Ask for a supervisor.

      In my opinion gas forced air heat and air systems are less expensive on the heat side than heat pumps. Gas is very low priced now and folks I know with heat pumps pay considerably more for heat than gas systems. If it is an electric furnace, well I have never heard of those outside of heat pumps. Whether or not you have a claim depends on a number of factors. This is really a question for a lawyer. The problem is that the attorney will probably cost more than the $600.00. But saying this is not legal advice, here is my opinion: If the seller said it was a heat pump and it wasn’t you would have to be able prove that they knowingly lied. They could say they really thought it was a heat pump and you had a professional inspection. I can’t really see how you could win that argument. If you got back in the neighborhood of $300 on the inspection, you will probably save enough money on heat in the first year or two to make up the other $300 if it’s a gas furnace. I know it is a pain to have something like that come up, but if you really want to go after the seller I would recommend talking to an attorney.

      • Sandy Brookover says

        The technician stated that the furnace was deliberately wired to run both the air conditioning unit and the furnace at the same time. It is an electric unit no gas. When my daughter moved in, the inside furnace was frozen over, actually had ice on it. The warranty company will not pay. Our real estate agent even called and protested it. The AC unit is outside and the furnace is inside.

        The owner states she did not know it was not a heat pump unit. So there is no way I can prove it. However, could I not file a small claims case asking for the $600 back?

  3. Suzy says

    Here’s one the seller answered “Don’t know” to half the question and “No” falsely to others. Like there’s vermiculite in the attic which the EPA states to assume has asbestos and to professionally remove prior to renovation. They renovated the home without removing it and then put cellulose over it. The vermiculite is falling out if the ceiling fan openings and the bathroom fan. The foundation has major issues. The walls have long cracks they tried to hide with paint. There’s mold in the walls and in the attic. There where several plumbing issues which resulted in the home getting flooded on day one of move in. The home inspector and our so called “realtor” where useless and no help. I feel the seller tried to hide or pled ignorance to this stuff. But do I have a legal leg to stand on?

    • Dan Connolly says

      You will have to show your contract to a lawyer and get his or her opinion on that. It is how the contract is written that will determine whether you have a case. Most inspectors limit their liability to the cost of the inspection in the contract they have you sign, so you need to look at that.

  4. Cyndi says

    Hi, I recently purchased a condo from an elderly woman & her son who was POA. Am wondering where to find the actual seller disclosure laws for Georgia. Turns out the son lied about several things, but the main one being the HVAC. I did have home inspection and that is when it was discovered it did not work (cool). He said he would take care of it, that he had switched off the breaker outside. Then he said he was having an a/c guy out, said it was a professional company. He changed the story several times. During this time, I requested the work invoice or information about what the problem was, at least a dozen times. The last thing I was told was that nothing was done, it was the breaker. I went to the condo & it was working and we closed. Several week later, my tenant moved in and again the air was blowing warm. I tried to get the original a/c guy information but the RE agent didn’t get it and I had to call my own. Turns out it was a leaky accumulator. The a/c tech said that he probably just filled it with Freon for a quick fix. So I went round & round trying to again get information from the seller (son) thru the RE agent & broker. To no avail, except that the son did finally send an email to the broker admitting that they added 4-5 lbs of Freon. I am going to take him to small claims court, as he blatantly lied and withheld information. I believe I have a strong case, and have all the emails to prove what transpired. But I need to know exactly what grounds to sue him on. I am only asking for $2000 which is half of the price for new HVAC and is the amount I would have reduced the offer by, had I known of this issue. Do you think I have a good case & can you tell me where I might find the actual laws for GA that I can cite? Should I also sue the RE agent, or just call as a witness? Appreciate any help you can give.

    • Dan Connolly says

      The best approach would be to hire an attorney. Without seeing all of the communication, including the disclosure it’s impossible for me to know if you might have a case or not.

      Normally I would recommend a buyer who has issues with an HVAC system insist on having either a HVAC company of their choice or a fully licensed company provide a document that the system is in normal working condition. Without that, I would suggest that they do not close. It would be hard at this point to know whether the system could have been repaired or if replacement was actually necessary. In my opinion you might have a case, but it is really a question for an attorney.

  5. TomBarnes says

    Approximately 3 years ago we bought a home GA that was a foreclosure sale from a real estate company that was owned by a local bank the same bank was selling the home. The home was on a nice dead end street with a soccer field next door. We thought all due diligence was done and completed the sale. Unbeknownst to us the county was planning to build a court house next to our home (this had been in the planning for 5years) two years before we bought the home. I will also add the home was sold as is. The rest of the story is we were never told of this and did not have the good sense to ask about future plans for property next door. Now we have a court house and a Bio Swale 15 feet from our property line that is collecting trash and breeding mosquitos and our property value has gone down.

    • Dan Connolly says

      That is terrible. First of all I am not familiar with what a Bio Swale is, but I would call the county and try to get them to clean it up. Leyland Cypress are fast growing evergreen trees that you could plant on your property line. Talk to a nurseryman and plant them the correct distance apart and keep them watered during the dry months (if we ever get dry months) and fertilized regularly. I am not sure how often to fertilize but the nurseryman should be able help with that as well. When properly cared for they will grow as much as 6′ a year and get about 50-60 feet tall at maturity. They will create a natural separation that will probably help restore your value. Hopefully the direction doesn’t block too much sunlight.

      • Tom Barnes says

        Thanks Dan for your reply, we have some Leyland Cypress planted and are planning for more.
        Bio Swale is a drainage pond that collects all the run off water from the court house it drains into the Bio Swale pond plants are planted to help dry up the water. Our major concern is does the bank have any discloser obligations to tells us about this. They had information because this county court house was in the planning stages for 5 years. Five homes are effected by this and we feel they did not live up to there obligations.

        • Dan Connolly says

          Well it’s really a question for an attorney. Did they give you any kind of disclosure when you bought or did you sign something which acknowledged that they did not give you a disclosure and you were accepting the property as is? That would seem to be the heart of the question. The contract that you signed to buy the property is what will answer it. An attorney would be the one to ask. Probably doesn’t make sense to get an attorney who makes his living arguing cases in that courthouse, as it could be a conflict of interest.

  6. tiredofdishouse says

    we purchased a house in 2008 in Clayton County Georgia. A month after purchasing the house the basement flooded we thought the problem was corrected and we contacted the insurance company which they did not do anything because it was an act of nature. Every time it rained the basement would flood which ended up causing black mold to form in our basement. We had that treated which will last for 5 years. Also we cannot run the dishwasher and washer at the same time because it causes the sewage back up in the basement bath tub. We have a swimming pool that does not have a drain we had a heating and air guy to come by to light our pilot because it kept going out. He informed us that the wrong type of tape that was use on the vents should ve been silver electrical tape and not duct tape. Georgia Power came to look at our furnace and informed us that wiring on the furnace was installed improperly. All of the our phone jacks did not work. On top of all of this we had an inspector to inspect the home. Can we sue because none of this information was disclosed during closing.

    • Dan Connolly says

      Sorry this took a while. I found some comments in moderation that I did not know were there. Well whether or not you can sue is a question for an attorney. Of course I am not one, and I could only offer an opinion. Did you get a disclosure from the seller? Generally foreclosure sellers do not provide them and have a lot of language in the closing package about the sale being “as-is”. If you bought from a regular live seller, and the disclosure does not mention these items you might have a case if you can prove somehow that they knew about these issues. The inspectors have contracts that you sign that your attorney could look at. Many limit the liability to the cost of the inspection, but some offer bonds to a limited dollar amount. The fact that this is 5 years ago may have some impact on your ability to collect, if you do have a case. I do not know what the statute of limitations is for this. All of these are questions you should ask an attorney.

  7. Andre says

    What about asbestos? We just found asbestos in the drywall of a home in the due dilligence phase. Is the seller (a relo company that has never occupied the home) required to disclose the asbestos to future buyers if we walk?

  8. Matt says

    Just thought I’d update this. The seller made good on the termite problem and the house has been closed on. I thank you for your help.

  9. Matt says

    I say acting as his agent as she is in charge of his properties. She “renovates” them and sells them. The closing is handled by an attorney or so they say and no, I wasn’t there at the close.

  10. Matt says

    I bought a house last March (2012, not 2011) and right at the end of April I had a huge termite swarm inside the house. No exaggeration, we’re talking close to 100,000 or more.

    The person I’m buying the house from (owner financed) never said anything about it having a termite problem in the past but it did have a roof issue with a leaking ridge which resulted in a sag. Strangely enough, when I mentioned getting an exterminator he was pretty emphatic about me not getting one. Supposedly they lie, don’t do good work, gouge, etc, etc.

    After having a couple of pest companies come inspect the place I’ve learned that it was treated probably around 10 years ago but only around the perimeter of the foundation, they’re coming up around the piers (in plain view) and he estimates that they’ve been there at least 5 years. As a result I’m kind of at a loss as to what recourse I may have. Where I’m from (AR) I could take him to court and be awarded the property free and clear for the lack of disclosure if I could prove he lied or withheld information. What kind of protection does Georgia offer? What are my options?

    • Dan Connolly says

      In Georgia, they used to have a standard requirement that the Seller provide a termite letter within 30 days of closing showing no active termites. The termite industry is not heavily regulated in GA so in order to make sure that the letter was valid, the powers that be decided to move the responsibility of hiring a termite inspector to the Buyer’s side as something that would be included in an inspection. Did you get an inspection of the property?

      Then there is the question of a disclosure. Did the seller provide a disclosure? If he did and it could be proved that he lied, you may have a case. I think you need a lawyer for this. I am not an attorney and cannot give legal advice. The contract to purchase and disclosure (if any) should be reviewed by a real estate attorney.

      • Matt says

        The only inspection, as such, was me looking at the property before purchase and discussing the issues I saw with the person acting as the agent to the seller. I have yet to get my closing paperwork back from the seller.

        • Dan Connolly says

          When you say “acting as the agent” what do you mean? Was it an licensed agent? How did you close? Did an attorney close the sale? Were you at the closing? This whole think seems out of the ordinary. I think you need to get some legal council.

  11. Bob says

    Do Georgia Real Estate Agents have to tell you if a sewage treatment plant, landfill or some other non-residential friendly activity (a bridge 100 yard from the property) is being considered by the City or state

    • Dan Connolly says

      If they know about it and you ask them they have to answer truthfully. Part of it depends on if you are talking about the Seller’s listing agent or the Buyer’s agent representing you. I think there are listing agents who do not know what’s going on in the area, and buyers agents may not know as well.

  12. Jane Cuningham says

    I appreciated the article. The former tenant of the house we are buying keeps leaving nasty notes saying the house is haunted and even painted ” warning Haunted House “on the side. I feel like I am in a Scooby do episode. what is he going to do next.. run around the yard in a sheet going “ooooooooooo”? I asked my agent to ask the listing agent to put up no trespassing signs on the property Should I ask him to go by with bell book and candle?. Any other suggestions? and just in general ” I ain’t scared of no ghosts” we haven’t closed yet but can we sue teh former tenant for harassment or tortious interference with my right to contract? Former tenant is obviolusley trying to intimidate me.

    • Dan Connolly says

      Well tenants are always potential deal killers. They generally say things like “we love the house, the only problem is when the rats run across our faces while we are sleeping” or “We love living here except that the neighbor’s dog barks all night long and then his kid starts playing the drum set at 7:00 in the morning”.

      The bottom line is they don’t want to move and will say anything to kill the sale. It’s rare that they keep it up after they become the “former” tenant. If he’s moved out and is coming back with this kind of stuff, that’s unusual. I would just ignore it and if he comes back after you buy the house I would call the police and maybe file a restraining order….but I bet he doesn’t.

      After we bought our house a neighbor who had lived across the street for 50 years told us one woman killed her husband and then hung herself in the living room of our house. We thought she was probably making it up. But later we found bullets buried in the floorboards in the dining room and one night our garbage disposal turned itself on at 4:00 am………(lol) …even so, we still don’t believe in ghosts!

  13. Lin says

    Great article…what about other things such as bats living inside the walls that didn’t show up on inspection but seller knew about?

  14. Ira Smith says

    Dan,
    I was wondering if you could give me your advice on a situation I have here in Ga.? We bought a house last year that was listed as lake front property. I asked the realtor several times about the property lines at the lake, easements, rights to the lake, etc. and I have several e-mails that she answered specifically stated that I have rights to the lake, but can not have a motorized boat on the lake. When we stated to clear the property it was discovered that our properties line ends about 400 feet from the lake. She even walked the property with me showing and telling me where the property was. I have the e-mails and original add listing the property as lake front. I have contacted a lawyer, but have not heard much from him. Do you think I would have a chance in small claims court, representing myself with the evidence I have?

    • Dan Connolly says

      Sorry I did not catch this earlier. I think as long as the area between the border of your lake and the actual lake is not owned by another individual but is a part of the lake’s property you would probably not prevail. In my OPINION I think lake front would be considered to be the first property that borders the land controlled by the lake. Some of GA’s lakes are considerably down over the last couple of years, you may want to find out where the high water mark is for the lake. The only way you can be sure about the boundaries of your property is to get a survey. Most listings have statements like “information believed true but not warranted”, and I would think if an attorney is not interested you may not have much of a case.

  15. Susan says

    Yes, I’m afraid GA lacks the real estate professionalism other states enjoy. When I bought here in 2007, I though I had the worst real estate agent born on the planet. Five years later, based on looking at a property and relying on the seller’s disclosure, I had an inspection. The sellers out-right lied about everything. Major appliances (like the furnace, a/c and water heater) were stated to be 6 years old when in actuality, they are 25 years old. I pulled panels off the wall specifically designed to cover up holes and other defects. Not one window opened, nor did the back door. And yes, the inspector indicated that the realtor might be mad at him, but he took me aside and said “run.”
    Now this cost me $430 (The Landings, Chatham county). Can I be reimbursed for the inspection since the seller glaringly and knowingly lied about everything?

    • Dan Connolly says

      Without looking at your contract it would be just a guess, but I would think you might have a case in small claims court.

      There is something that gets under my skin a bit with the inspector saying that the realtor might hate him. Why would a realtor hate an inspector that tells the truth? That inspector needs to be a little more professional himself and talk openly about every defect. Any ethical realtor would want every defect revealed and would work to get the seller to either repair the deficient items or reduce the price of the house to cover it. That is something that we deal with on every sale.

      I always point out every defect I can see when the buyers make their first trip to the property. I don’t want any of my buyers to waste any inspection money on houses with defects. NEXT!

      I don’t think that Realtors are any less ethical in Georgia than anywhere else in the country. There are some that are unethical in every market, that is the unfortunate reality in every industry, from car repair to financial consulting, in just about any industry.

  16. robert says

    Hello,

    I have a question regarding my home and disclosure statements. We purchased a home a year ago for our soon to be growing family. My wife was pregnant with twins. Anyways, on the disclosure statement, the previous owners only noted that there was “puddling” in the back/side yard and that the drains sometimes get full. Since we have moved in, there hasn’t been “puddling” when it rains….there is literally waist high water in the back/side yard. The drains completely over fill and fill into our yard within a matter of an hour if it’s sprinking. We have contacted our city for drain issues and other residents who have lived here for many years have been fighting to have the drain issue fixed. The water gets so high that a police officer sometimes must close off our street because cars cannot drive through it. If we would have known this….we would not have purchased the home with two new infants. I watch my kids but 3 inches of water and fast moving water are STILL concerns for any new home owner. We cannot ever use a swing set in our backyard because it would rot from the rain or get swept away. Our basement has never flood though, thank god as far as the inseption goes. But other neighbors have had their basement flood 3 times. Is there anything we can do? Can we sue the previous owners for not disclosing? From what I’ve read, we can only get back for damages which we don’t have any as far as the home but we will never be able to sell the home ourself because we would be honest on the disclosure of the flooding not “puddling” issue. We are looking at moving but I doubt it with this issue. Any advice would be appreciated. Thanks, Robert

  17. Willis says

    Hi Dan,
    I see on your post from Sept 15, 2010, that an easement on a property should have been discovered by the closing attorney or title company. In Georgia, is this information the closing attorney should have mentioned at closing? I ask because I purchased a home in Georgia and a few months later, while undergoing construction, discovered a significant easement (45 feet) in my yard. This is the first I heard about the easement and am curious if I should have been notified by someone prior to closing.
    Thank you for any advice you can provide.

  18. Ron says

    This has been a very interesting read. I will certainly think twice or maybe even three times before I would ever relocate to GA.

  19. says

    I stumbled across this website, and it has been a real eye opener. My husband and I purchased a home in Georgia after 30 years in the Army. When we bought the house the owner walked us around the property and pointed out various aspects of the land we were going to purchase. Some of the pictures we were shown showed the property. At no time were we told to get a survey by the agents. We received a plat but no house on it. The own signed all the paperwork stating there were no problems with the property and putting an addition on the house would not be a problem. She also never told us her husband had died in the house. That in itself would probably have been a deal breaker for me.
    We have since had had a survey with the house plotted on it. We discovered not only were we sold property that wasn’t ours, but the drain lines coming off our septic tank didn’t sit on our property.
    We attempted to work with our neighbors to resolve this issue. The decided to go to court instead. We lost. We are now having to move our septic tank lines, remove landscaping, and have part of our driveway dug up in oreder to move the septic tank lines in our front yard.
    We will be forced to sell our house at a huge loss in the event we can even sell it. Yes we had a lawyer. No we did not buy title insurance. We were told it wasn’t necessary.
    To say this has been a nightmare would be a gross understatement. The judge said we have had some “bad luck”.
    Yes I would strongly caution anyone thinking of buying a home here to think twice.

  20. Dan Connolly says

    First of all if there is an easement on the property to the graveyard that should have shown up on the title search and been discovered by the closing attorney or title company, depending on where you live.

    Is it an adverse fact? I could imagine that since it is on the back of your property and covered by brush etc. the Seller may make the argument that he didn’t see it as an adverse condition. Interesting but not necessarily detrimental. It would be a problem if you wanted to build a pool or something like that, obviously, but I am on the fence about whether has to be considered adverse by everyone. Really not sure how a judge would look at that if you went to court over it.

    I would talk to the attorney who closed it if you are in a state that closes with attorneys or with another real estate attorney if you are in a title state. I understand why you are upset, but I am not sure how the law would look at this.

  21. Ashley Scwartz says

    We purchased a home in 2008. After living in the home for ~2 years, we were told by a neighbor there is a graveyard located in the woods behind our house on our property line. After walking into the woods and clearing away brush, two small headstones were found. We retrieved our plat from the county courthouse (which we were not shown during closing) and it was determined that the cemetery is located on the back portion of our land and is accompanied by an easement on our property. On the disclosure statement from the seller the box was checked no for any other adverse, material facts pertaining to the condition of the property. I would think a graveyard on the propery would be an adverse fact. None of this information was disclosed to us prior to closing. What can we do?

  22. Dan Connolly says

    I am sorry to hear about this. I think you need an attorney. The builder claimed he informed the original owner who was an agent. She flipped it to a builder who can’t get a permit. Can you reach the builder? Being the suspicious type I would not automatically assume he is telling the truth. Maybe he duped the agent and she sold it without knowing. Who really knows?

    In any case someone lied and may have some responsibility. You should find a knowledgeable attorney in your area to advise you on your rights. If the statute of limitations hasn’t passed, you may be entitled to some compensation, IMHO!

  23. Mary says

    What if seller neglects to tell you that he is subdividing the property your house was originally sitting on and your field lines are on the adjacent lot. The house was built in ’98. I purchased it in ’02. The real estate agent of the seller bought the lot with the proported intention of developing it. She flipped it about a year later at a profit of $14,000. The guy that bought it from her uncovered my field lines in ’05. I hired an attorney to keep from having to move my lines because my lot will not support a septic system, hence that is why the 2 lots were originally sold as 1. It’s now ‘2010 and my attny is suggesting that I purchase the lot. Due to the housing market collapse my house now appraises at $71,000. A year ago is was $120,000. I don’t want the lot. I don’t know who is at fault, but someone knew that about those field lines. The builder said he informed the original owner, who says that he didn’t know. My hunch is that his real estate agent discovered it either before or after the sale. Either way she sold it “as is”. The county isn’t forcing me to move my lines and have since revoked the building permit of the owner of the lot. I”m afraid I will never be able to sell that lot and if I have septic issues I will not be able to put new field lines on that lot.

  24. Dan Connolly says

    I don’t know about this, it seems that for some people $9.00 per quarter may seem inconsequential, while for others it could seem excessive. The folks that go to Starbucks for $5.00 coffees every day might not think much about a $3.00 per month increase and honestly forget it. They may not have been deliberately hiding it, but may have been thinking only about assessments like replacing all roofs or re pouring the parking lots etc. I think the recourse happens when you can prove that they were deliberately hiding it.

    Did you find out about this during your inspection period or after it was over? I always encourage the buyers to carefully review the association during the due diligence contingency so if there is anything like this they can cancel the contract if it proves unacceptable. If it’s a deal killer you might ask the seller to cover the cost of the increase for 3 years ($100), if you are still in the inspection period.

    Its a good question! I don’t seem to have a clear black and white answer!

  25. C Klein says

    Very interesting article indeed. We are in the process to purchase a property. Seller clearly stated in his disclosure when asked “Is there any condition or claim which may result in an increase in assessments and fees?” – Seller’s answer to the question was “No”. He did have the option to say “Unknown”.

    I just called up the HOA and was told that since 2007 HOA fees have been going up by about 9 dollars a quarter due to foreclosures. And that HOA expects this fee to keep going up at this or somewhat higher rate in the future due to increased number of foreclosures in the neighborhood.

    My question is: Does the seller need to disclose potential HOA fee increase due to excessive doreclosures in the neighborhood?

    Is 9 dollar per quarter substantial enough increase that it needs to be disclosed?

    Low HOA fees were really important to us and 36 dollar a year increase is almost a 25% increase over our current HOA fee.

  26. N Punga says

    Dan – a question. We are purchasing a property and few days before closing found out that there is going to be a 100 ft cell tower to be erected 900 ft away from the property such that as we exit our front door that this tower shall be right in our face. We have just moved to South Florida and wonder if we have a recourse. We still have not yet closed. Any suggestions?

    • Dan Connolly says

      Well real estate laws are state laws so you should talk to a Florida lawyer who can advise you correctly on how to move forward. In general most states have disclosures and if there is a question on yours about any issues which may affect value and the seller said “no” you would have a case if you could prove that he knew about it and did not disclose it to you. This is best handled by an attorney who can review the actual contract.

      Good luck!

  27. kabson says

    i still need to know little more about a suicide. i bought my house 3 years ago and i learned from my neighbor that my house was a suicide site. someone shot them self in the garage. can i go after somebody for not telling me that important info. thank you so much

    • Dan Connolly says

      As I understand it (not being a lawyer, this is just an OPINION) the Seller does not have to notify you about a suicide. If you ask and he does not tell you that would be a problem, but they do not have to offer the info if no one asks. It is a weird quirk in the law but I think it prevents houses from being stigmatized.

  28. Shboom2 says

    … to ask all the right questions and I STILL got screwed and am now stuck with a money pit in a neighborhood with crime problems that were not on the county Web site. People new to GA need to be WARNED about the deceptive business practices down here! One of my coworkers is flying an inspector in from out of state to inspect her next house!

    • Dan Connolly says

      Well I hate to hear this. I think that in every industry there are those that are better than others. Your co-worker’s ideas about Georgia inspectors are not realistic. The inspectors are not all united on how they work and think, there are some excellent inspectors and there are some that aren’t so hot. Home inspection is not an industry that is highly regulated here, so there is a wide range of skill levels out there.

      I think that the inspector’s job is to figure out the age of the systems and if he told you it was 5 years old and it turned out to be 16 years old, then you may have recourse against the inspector, even if it’s only limited to the price of the inspection, that can be significant.

      Also one of the primary purposed of the disclosure is to give you some ammunition if you have to sue the seller for hiding defects. If they outright lied to you I think you should consult an attorney. Lying about septic issues and age of systems is illegal and you may be able to win in court. The disclosure is a document that you can use to prove they lied, and you may prevail.

      For anyone buying a house, you can always go to the local police precinct and get the crime statistics for any neighborhood. There is no way anyone could know for sure what is going on. The seller or agent could easily not ever hear of break-ins or other kinds of crimes. When you look at the actual statistics, many of the most upscale, suburban, supposedly safe areas have a significant crime problem, while some areas that may seem like they would have more problems, actually have less issues.

      • Janet Scanlon says

        I feel your pain I am from Florida and these practices would NEVER even be a thought in someones head to think of pulling …. the counties inspectors and courthouses on every real property transaction like white on rice. I have a problem with knowing that the Sellers Disclosure as i was told in Floorida from when I sold my house…. The sellers disclosure is a Federal Act..DO NOT LIE on it, even if you changed a receptacle cover put it on there!!! Lying on this is breaking a huge law and you DO NOT want to play with this paper it is the single most important form you will be filling out and signing. That is what my agent in Florida told me and they were very adament as to take my time and put EVERYTHING no matter how miniscule I may think it is. It apparently is not here in this stae; the Sellers Disclosure in Georgia is only a piece of paper that is only good to wipe your bum with when you are on toilet. I am sorry for you Shboom.

        Dan feel free to give Shboom my email addy and I will be more than happy to let him know my plans and give him ideas on how to get him a case together.

        • Dan Connolly says

          The disclosure is a valid document here and if they lied on it you will have a case! It is not a worthless document in GA! You have to pursue it with a lawyer in court, but the disclosure has as much validity here as it does in Florida!

          • Janet Scanlon says

            I hope this will hold up the problem is finding a lawyer who is not affiliated with the Tilte Insurance Company. Wish me luck and great job on the article. It was very helpful, especially the discussion following it, I am sad to see that this is not only my own unique situation, but comforted in knowing I am not the only one with this problem. Thank you Dan!

          • Dan Connolly says

            Thank you, I’m glad that I could help, Janet! Good luck with this and keep me posted as to how it works out.

  29. Shboom2 says

    I just moved to GA and bought a house and I have been totally appalled at the poor construction, lax inspection process and dishonest disclosure standards. I don’t know what on earth I paid my inspector for, since the first 3 things I signed were all documents promising to not to hold him liable for anything. And then all he said on anything was “appears serviceable,” and wouldn’t answer any questions. Within my first 48 hours in the house, I had electrical, faucet and furnace issues. The sellers claimed that the furnace was five years old – I have since learned that it is 16 years old. They also said they had serviced the septic tank a few years ago, and I found out from neighbors that these folks actually had a total system failure and it flooded the back yard. I’ve also been told that the owners’ dogs were permitted to freely poop and pee in the house, and fight. So the walls were painted dark to cover the blood, and the carpet is all mismatched. I have no clue what they did to fix the septic field. None of this was disclosed, and they lied on the furnace age. I have spoken with coworkers who moved here and they say that in GA, the inspectors don’t consider themselves working FOR you and they are more concerned with moving sales along quickly so real estate agents can make their money, therefore giving the inspectors more business. In my office alone, two people were conned into buying houses with broken foundations. Others had problems more like mine – less severe but still expensive to fix. I’ve been told that GA’s entire real estate industry is dishonest. I am at wit’s end because I don’t have the money to fix everything that has turned out to be wront with my house. I am frustrated because I TRIED

  30. Dan Connolly says

    What a mess you are in! What county is forcing these issues? I have heard of the building inspectors cracking down on builders who built without permits, but not on new homeowners who had nothing to do with the construction. How long has the addition been there, do you know?

    • Janet Scanlon says

      As far as I can tell with all my research and asking the neighbor, it seems as it could have been here since 2002. The county I am in is Paulding County. The building official and the commissioners are all on my side, However; they said regardless it needs to be coded or ripped out. I dont blame them. It is clearly a violation but they are willing to work with me in whatever statements they need to give to the insurance companies. The problem is the Title Insurance company does not want to pay the claim! I have a valid claim I believe under the following covered risks:
      #14 Because of an existing violation of a subdivision law or regulation affecting the Land:
      a. You are unable to obtain building permit – (only permit i can obtain is to rectify/remove the existing 1800 sq ft addition – not repair work for roof leak damage)
      b. You are required to remove or corret violation – (yes county is needing me to do)
      c. Someone else has a legal right to, and does, refuse to perform a contract to purchase the Land, lease it or make a mortgage loan on it.
      #15 You are forced to remove or remedy Your existing structures, or any part of them – other than bondary walls or fences – because any portion was built without obtaining a building permit from the proper governing office. The amount of your insurance for this Covered Risk is subject to Your Deductable Amount and our Maximum Dollar Limit of Liability shown in schedule A. (yes that is what I need to do and I feel I should collect on this, obviously if I am only legally showing 1600 sq ft on books but home is actually 4300 sq ft there was obviously addition without permit)
      #26 Your title is unmarketable, which allows someone else to refuse to perform a contract to purchase the Land, lease it or make a mortgage loan on it. (BINGO! i can not sell this home the way it is, it needs to be brought to code and remedied..I could not give the house away if I wanted to, the county will not allow ownership to change as the house is in this condition)

      So in a nut shell the Title Insurance company is backpeddaling and claiming there is a bunch of fine print and I have gone over the policy with a magnifying glass and all print IS readable.

      It is a terrible mess I am in the problem is all the estimates rolling in now it looks as though this job is going to hit the $60,000.00 mark and I refuse to pay that kind of money for someone else’s gufaw. It is a shame and I certainly hope my case will bring attention to someone and they can use my situation as an example of Law change in this state and more Consumer Protection. I am from South Florida and this would not have even made it to the market in this condition Florida has tough Consumer protection especially when it comes to real property.

  31. Janet Scanlon says

    Dan,
    I am in the same predicament as Tiziani Zorzi above. I live in Georgia. I would love to know if you could get in contact with Tiziani above so that I may get some information as to what her situation is turning out to be. I fortunately bought title insurance that SHOULD protect and cover me however they are trying to deny the claim. My situation is I purchased a 5br 3 bath home 4200 sq ft. that was represented to me throughout the entire purchase by the sellers and my agent. After having a roof situation and the county coming to inspect the roof, I have found out this house is legally on the books as a 1600 sq ft 3br 2 bath home. The other 1800 sq ft is all additions non permitted and MUST be removed or permitted and redone. Now i am finding out through investigating my closing documents and title searching that the deed actually was transferred and sold to a relocation company 1hr prior to my signing of my closing documents. So legally I was purchasing the home from this relocation company and not the residents living in the home. However all documents pertaining to the sale of the home…Inspection reports, sellers disclosure etc… were signed by the residents living in the home NOT the relocation company of whom I legally on paper purchased home from. This entire deal was a lie and I was DOOPED. I am currently trying tpo find an attorney who is not affiliated with Ticor Title and is willing to sit down and get me some answers because no one is being of any help…. I want no other person to EVER have to go through what I am going through. $200,000.00 is alot of money for me to lose and someone dropped the ball on the transaction. So lastly, I know and understand you are not in any position to advise legally I was just wanting to know if you could forward this to the lady I mentioned and see if we can not get suggestions from each other. You would think that the Federal Government would be interested in some of this, because they are the ones who through Fair Housing Department created the Federal Act of Seller Disclosure Rule.

  32. Dan Connolly says

    Alison,
    I would have to suggest that you take this to a lawyer first and foremost. I will give you my opinion on this but it is by no means legal advice. I do not believe that people with the defective Louisiana Pacific siding were notified of the class action lawsuit. It was fairly heavily publicized but I never heard that they had any way to identify and give notice to homeowners who had the siding. I also would think that you would have to prove that the homeowner knew about this and withheld the information from you. I don’t know what the statute of limitations on that kind of lawsuit are, that is another question for a lawyer who has a practice in your state.

    My guess would be that you will not have recourse, but perhaps since the mortgage holder is the seller really was unaware of the problem, they may have an interest in protecting the value of the collateral on their mortgage, and may be open to getting the repairs done and perhaps splitting the cost with you (by increasing your mortgage, rather than you paying your half).

    Good luck!

  33. says

    Hi, Dan,

    I wonder if you can answer this question for me? I purchased a home in January of 1999 which was later discovered to have defective lap siding. I was not aware of the class-action lawsuit until the deadline had passed. The class-action lawsuit was initiated in 1997, I believe, and was in full force by some time in 1998. Was the seller required to disclose that this siding was defective? He had to have received notices of the impending lawsuit. At that time there was no evidence to suggest that the siding was defective, but obviously in the ensuing years it has deteriorated. By the way, the seller, out of the blue, approached ME near the end of 1998 to suggest my buying the house, which I had been simply renting since July of 1996. Another bit of information is that the seller is the mortgage holder. I am a widowed mother of two young children and simply can not afford the repairs, and I am desperate to know if there is anything I can do!

    Thanks if you can help!

    Alison Holland

  34. Dan Connolly says

    Generally with these kinds of questions I would have to suggest showing the original paperwork to an attorney. This is a legal question and we are not able to give legal advice. I would think that there would be some recourse, but it would all depend on the exact wording of the disclosure, the wording of her explanation on the disclosure and the laws in your state.

    • Kay Jones says

      Dan, thank you for posting this article. Food for thought, I am in middle of purchasing my first home REO from bank with no disclosure other than “AS IS”. Found during my digging that the appraiser requested a repair to the property, ie. not to current code. After conversation with County Building Inspection Department – the “defect” wasn’t a defect at all and was allowable code at the time of installation. He made comment that over 90% of the homes aren’t up to current “code” status. And legally they can’t make you rip your house apart and bring it up to current code. I was told you can legally repair anything existing right back the way it was. The only time you would need to pull a permit / and bring up to code is if you went through a major disaster / home renovation affecting over 40% of the total property. Found that interesting and thought I would share. Have a great week.

      • Dan Connolly says

        Thank you Kay! Another interesting twist is that a foreclosure seller will generally not disclose anything even if another buyer had an inspection, submitted it to them asking for a reduction in price or repairs and then walked away from the deal. Their reasoning (as explained by one of the asset managers) was that the inspection industry is not regulated and (in GA anyway) it doesn’t take a lot of education to become an inspector. So they are not sure that the inspector was qualified to make the call, and are suspicious that there may be some bogus inspections out there attempting to drive the price down.

  35. Tiziana Zorzi says

    Dan – a question about Seller disclosure. Seller had basement partially finished in 2004, same year as she and husband separated. House was ‘sold/quit claimed’ over to the wife by husband as part of settlement. In 2009, Seller sold house with Disclosure statement stating and signed by seller under section 4 e, f, g to which she marked ‘no’ ONLY to find that there were additions (finishing off part of the basement to item e) and that there were NO permits obtained for the work, which she marked ‘no’ to item f that there was no work done for which permits/approval were not obtained and to item g she also said ‘no’ to has any work been done to property that was not in compliance with building codes or zoing regs. NOW based on this disclosure we thought we had ‘value’ in the property because of this partially finished basement which complied with codes, had permits for it’s constructions etc. We only found out that none of that was true late last week when we went to swap out a lighting fixture and found no insulation between drywall and cement basement wall which led to us asking the City about any work permit for the project. They came back with NO PERMIT had been issued in 2004 for the work. The Seller now states that it was the responsibility of the Contractor to get the permit and to deal with them. I will not do that because if Seller now has problem with Contractor for not adhering to any original Contract which required that the Contractor get all permits and pay all fees as part of the estimate……….then it’s between Seller and Contractor – that is nothing to do with us. What is to do with us – is that the Seller’s Disclosure statements contained INACCURATE information about additions which will now have to investigated for code adherence, check electric, check plumbing etc so that it is all to 2010 codes and not 2004 codes. We based our purchase on ‘value’ in the basement and that all paperwork and permits had been obtained. Now, if we were to turn around this year and sell it – we now know that there was no permit pulled for the work and the value in the house is NO LONGER there as it was when we bought it. We have been ‘damaged’ by the Seller’s inaccurate Disclosure on her house. What are your thoughts as to what we can do???

  36. Lorraine says

    Dan,

    You indicate that in GA a home seller is not required by law to disclose that the house “was the site of a homicide or other felony (including rape) or the site of a suicide.”

    Specifically for suicide, do you know if a landlord does not have to disclose to a potential tenant about the suicide either.

  37. says

    That haunting category is interesting, and reminds me of a message from my pastor recently. He was talking not as much about ghosts, but more about evil spirits dwelling in houses and, basically, remaining in the house, after the previous tenant left. Had the previous occupant a grizzly history, the question discussed was whether or not evil spirits remained and needed to be removed.

    Interesting stuff to think about when house-hunting… :)

    Tina’s last blog post..New Jersey Shore Beach Holiday – Apartment Leases and Summertime Villas

  38. says

    Hi Dan,

    Great article and it certainly reminds us of the old term “Caveat Emptor” or buyer beware which doesn’t need to play a roll in today’s real estate environment. In Colorado although Sellers are required to disclose any defects they have actual knowledge of Buyers typically rely more on the whole house inspection and the title work rather than what the Seller reveals.

    Especially prevalant right now is bank owned (REO) properties with which the bank provides virtually no disclosure at all.

    With all the technology available to people there will soon be a way to learn more about the history of a property… I hope!

    Bob Maiocco@Denver Real Estate’s last blog post..Denver Average Temperature

  39. says

    Interesting post! It sounds to me like buyers should err on the conservative side and disclose information if in doubt. However with the market the way it is and sellers desperate to move their property, I think we will see more people failing to disclose pertinent information.

  40. Dan Connolly says

    Mack, Thanks for the props,I definitely agree in the honesty is the best policy slogan.

    Lynn, I would think that the Indian burial ground is something that could really impact your house’s value. They might try to make you move it, if they every found out! One of those times when title insurance might be the savior!

  41. says

    Interesting read, Dan. So many gray areas. I have only bought 2 homes in my life – both new construction. Personally I couldn’t bear the thought of someone dying or having been gravely ill in a home. But my new home could be built on an old Indian graveyard, so you never know! I wonder if builders have to research land history and disclose any sacred rituals or such that might have taken place? LOL.

  42. says

    Dan this is one of the best articles I have read in a while. Several years ago I was assisting an attorney with the purchase of a home and disclosed to her and her husband that a particular home was the site of a homicide and suicide. They did not purchase that home, for other reasons, but due to my honesty she has referred several other clients to me. I guess that “Honesty is the best policy”!

Trackbacks

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>