If you are in escrow on a home, you are very close to becoming a homeowner. During the escrow process, there are dozens of papers to read and sign that will notify you of different characteristics of the property. Many eager individuals will simply sign the documents without pouring over the text. This can prove a mistake if they later discover that they were warned of problems with the property.
Once disclosure forms are signed, the homeowner can no longer sue the former homeowner or the real estate agent for problems that were listed regarding the property. If a problem was concealed, however, and was never listed on any of the disclosure forms, then this may be a legitimate. Also, if the seller or the real estate agent failed to provide disclosure forms, then chances are that you will be able to seek financial reimbursement for home errors that were concealed.
Some states require more disclosure forms than others. For example, in the state of California, all sellers are required to fill out and give buyers a disclosure form for a variety of different issues. If the home has a leaky roof, or if deaths have occurred on the property within three years, these details need to be outlined in a disclosure form. Also, if the former homeowners know of neighborhood nuisances, such as a dog that barks every night on the property or particularly noisy neighbors, then these details must be disclosed.
Also, California buyers will need to sign disclosure forms if the property is in a flood zone, fire risk zone, earthquake fault line or another problem. These are all listed on a Natural Hazard Disclosure Statement. Also in the state of California, sellers are required by law to notify buyers of the law enforcements sex offender registration list and to help them locate any sex offenders that are living nearby. If the seller fails to do any of these things, it can be grounds for a lawsuit in the future.
When selling a home, it is important to err on the side of disclosure. If you have a question about whether or not to disclose an issue with the home, chances are that you should draft a form and present it to your real estate agent. For example, if you have loud neighbor's upstairs, or if you have multiple pets buried in the backyard, it may be important to disclose this information. If your home is in a community that participates in a Christmas light decoration contest each year, or if your home has been the scene of a crime, then you will want to notify a new buyer of these concerns as well.
If you fail to comply with the real estate requirements then you may find yourself in deep water with buyers. You will also need to disclose any lead-based paint in the home, as this can be dangerous. Whether walls or furniture are coated with lead-based paint, you will want to make sure you notify potential buyers for this, as it is a federal law under the Residential Lead-Based Paint Hazard Reduction Act of 1992.
According to most state laws, you will want to write all disclosures on special forms that are signed and dated by the seller. Make sure that the buyer acknowledges the receipt of the disclosures by signing and dating the forms as well. Even if your state doesn't have a specific disclosure form requirement, it is important that the buyer affirms a receipt of your disclosure in writing. If you want more information than contact an attorney promptly.