Real estate disclosure documents, also referred to as property disclosure statements, are legally binding documents. A seller generally provides this information to a potential buyer after accepting a proposed offer. The details of these documents depend on applicable state law.
In Florida, state law requires sellers disclose material facts that impact the value of the property. Examples can include:
- Water damage. Homeowners’ should disclose any damage that results from water leakage. This can occur due to a faulty roof or broken pipe within the home.
- Paint hazards. In previous decades it was not uncommon to use lead-based paint to decorate the interior of homes. State law generally requires homeowners who are aware of the presence of such paint within the home to disclose this information.
- Issues with code. The seller must also disclose any pending code enforcement actions. The seller will need to deliver a prospective buyer with information relating to the proceeding. The new owner would be responsible for compliance with applicable code issues.
- Presence of pests. Florida also requires homeowners to disclose any pest infestation history. This can include current or past presence of rodents and insects.
Essentially, sellers should disclose all material defects and legal issues that come with the property.
What happens if a seller is not honest on a real estate disclosure document?
A seller who fails to provide information about major issues can face legal ramification after completion of the sale. As a result, sellers are encouraged to practice the motto “when in doubt, disclose!” to mitigate the risk of future litigation.