When selling your home, be prepared to fill out a mandatory property disclosure form. A property disclosure form gives the buyer notice of any defects that are present in the home and will protect you from any liability those defects may create. Pennsylvania law states, “[a]ny 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.” Within the law, the term “material defect” is broken into two sections. The first section defines what constitutes a defect. The second section exempts items in the house that are not necessarily damaged, but are not working as well as they should.
The law defines a “material defect” as a defect to any part of the property that would have a “significant adverse impact on the value of the property or that involves an unreasonable risk to people on the property.” In laymen’s terms, this includes any damage, repairs, or updates to the condition of the roof, to the basement or any crawl spaces, to the plumbing system, electrical system, and to the heating and air conditioning. It is very important that you include the presence of termites or other wood destroying insects, dry rot, or pests in the house, or any history of any of those issues. Any items that are being sold with the house need to be on the disclosures. You should always disclose the repair history of every item you are including with the house. Lastly, you should always include any structural problems or history of structural problems. You can find the full list of items here (page 4).
The second section clarifies, “[t]he fact that a structural element, system or subsystem is near 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.” This means that if you have a hot water heater that doesn’t work as well as it used to, or it is on its last leg, you do not need to include that in your disclosure. Although you do not need to include the condition of each item, including this kind of information will further protect you from any liability that may present itself in the future.
Most buyers will still buy a house that has some minor defects. It is always better to include a defect than to ignore one. Even the smallest defect can cause major problems later on that can lead to a lawsuit.
This article was written by Bob Dengler, a legal intern at the Law Offices of Jason Rabinovich