Posted by Eduardo (OR) on March 13, 2000 at 20:41:57:
Ben–
Ethical and moral considerations aside, do you live in the same town as the property is located? If you do and you don’t disclose, the buyer is going to learn about the problem and hate you for not telling him. Bad reputations are hard to live down. --Eduardo
Discosure question - Posted by Ben Clabaugh
Posted by Ben Clabaugh on March 13, 2000 at 11:40:11:
I own the option to buy a 3-unit rental property in Florida. Cash flow is great, but a recent dry spell caused settling due to the presence of expansive clays under the buildings. The bottom unit has a new crack in the floor, old cracks in the walls have come back, and the front door needs re-alignment. Rents and property values have increased so much since I bought the option, I plan on cashing in and finding a buyer to either assign the contract to or buy at a simultaneous close. Assuming the dry spell ends, the settling stops, and I fix the cracks and door, am I required to disclose the geology beneath my bldg. to potential buyers? Thanks in advance for any help or suggestions.
Re: Discosure question - Posted by Stephen(OR)
Posted by Stephen(OR) on March 13, 2000 at 22:32:30:
If you have never occupied the property yourself, consider using a “Seller’s Property Dislosure/Disclaimer Exemption Form” or other similar Realtor form. Then accompany that form with a written explanation of the material structural defect. Be sure to leave a place at the bottom of your explanation for the buyer to sign that they have read and understand the information. Also, you may want to make sure they sign it before the buyer performs their professional inspection, that way they can bring the problem to the attention of their inspector. In this fashion, if they want to get out of the deal based on their inspectors report, they tie up your property as little as possible and you can move on to the next would-be buyer.
Re: Discosure question - Posted by Bob H
Posted by Bob H on March 13, 2000 at 21:00:22:
Forget about moral & ethical obligations, you have a Legal duty to disclose all known defects. Patching the cracks and resetting the door, w/o disclosing the soil issues are textbook examples of attempting to conceal material defects.
Simply disclose everything you know up front, both you and your bank account will sleep better in the future.