Signing documents has never been a favorite activity of most people. I think homework may even rank below signing documents. The 10 page, 21 section, 253 question Pennsylvania Seller Property Disclosure Statement offers home sellers the task of doing both.
Picture the unwitting home seller in a dark smoky room with a bright desk lamp glaring down on them as the document completion interrogation ensues. What do you know about your home? What do you remember? Do you actually live here or not? Tell us everything you know then sign and date the bottom of each page, please!
Okay, enough with the drama. It's not that bad. The disclosure is one of the most complicated but necessary documents used in the conveyance of residential resale property. Let's explore some things to consider when completing the document and complying with Pennsylvania Residential Real Estate Transfers Law.
The Pennsylvania Seller Disclosure Law states that a seller who intends to transfer any interest in real property shall disclose to the buyer any material defects with the property known to the seller by completing all applicable items in a property disclosure statement. Per the Pennsylvania Association of Realtors®, A material defect is a problem with a residential real property or any portion of it that would have a significant adverse impact on the value of the property, or that involves an unreasonable risk to people on the property. The fact that a structural element, system or subsystem is at or beyond the end of the normal useful life of such a structural element, system or subsystem is not by itself a material defect.
I tell my seller clients to fill out the disclosure to the best of their knowledge at the time they are completing it. They do not need to research every question on the form as if their very existence depended on the correct answer.
Some sellers opt to have a pre-listing home inspection performed by a licensed home inspector. This inspection does not relieve the seller from the duty of completing the disclosure but could reduce the seller’s liability. The inspection report should be an added attachment to the disclosure.
The Seller Property Disclosure Statement is a living document that can evolve and change from the day a seller completes it until settlement of the property. Every time an agent or buyer asks a question about a home, and an answer is provided both the question and answer should be added to the disclosure. These questions are often put into email form and thus a disclosure trail forms. Be very aware of questions that are asked about your property and how they are answered. They could end up in conflict with your answers on the disclosure. If a seller’s home was under contract and an inspection was completed, and the report furnished to the seller or seller’s agent, this should also be disclosed.
Disclosure Law states that there is a two-year statute of limitations on damages as a result of a violation of the provisions of the Law.
Handled properly and responsibly the Seller Property Disclosure Statement becomes less of an interrogation and more of a competent sales tool. In many ways, it can substantiate the price you are asking for your home. Disclosing what you know about your home to the next buyer is more than the law or good business, it is the right thing to do.
Knowledge is Power!