First Time Home Buyers

Property Disclosures

We have a law here in Minnesota that says that sellers need to disclose what they know about their property. We have a form for it. The form gets longer each year. We are now up to nine pages.  It really is best for seller not to hide anything and to give as much information as possible.  Buyers need to know what they are buying and hiding a defect can cause all kinds of problems not to mention legal action from the buyers.

There are some things on our disclosures that no one really notices. Here are a couple that I like to point out to sellers.

Cemetaryact

Sellers are asked if there are any human remains burials or cemeteries located on the property.  As an urban Realtor this one is a little hard for me to imagine. I think that if someone has human remains buried in their postage stamp sized city lot it is likely that a crime was committed. It is a felony for the seller or buyer to remove the remains so there really isn't a do over or a second chance on that one.   In general I don't think it is a good idea to bury anyone in your back yard.  If you must bury them at least disclose that they are there.

Otherdefects

The other defects/material facts section on the disclosure is a tough one. It asks sellers to list any material facts that could adversely and significantly affect an ordinary buyer's use or enjoyment of the property. It would not be so bad if they would define "ordinary buyer". I work with many buyers and I have no idea what an ordinary buyer is.  The  phrase "could adversely and significantly affect" is also a bit vague. As a home owner I don't have a clue as to what an ordinary buyer is or what might impact their enjoyment of the property. 

Noudutytodisclose 

3508289991_e5b1498733 Apparently an ordinary buyer is not adversely or significantly affected by a death, murder or suicide on the property because the state has decided that such information does not have to be disclosed. So if there is a house that has had 5 owners in five years and in each case a family member who has lived in the house committed suicide in it and then killed another family member it does not have to be disclosed

The fact that the house is haunted does not have to be disclosed either. I often wonder how the ordinary buyer would be affected if they bought a haunted house, would the it significantly and adversely affect the buyers use or enjoyment of the property? If so doesn't the seller have to disclose it?

There are people who have religious beliefs that would require a home to be spiritually purified if someone died in it.  Having religious beliefs is fairly common, I think it may be classified as "ordinary".  If I were a buyer who wanted to know if someone had died on the property I would ask the seller. There doesn't seem to be a law against that and there isn't a law against the seller answering the question.

I am not a lawyer and it isn't my job to interpret any of these laws or rules. It is my job to let sellers know that they need to disclose and I help them through the process. I had some sellers lie to me once in a pretty serious way and I canceled my contract with them.  So far none have admitted to having human remains buried in the back yard.  I strongly encourage buyers to look for defects and to have a complete home inspection done by a professional. Most sellers are honest but some are not and sometimes they really are unaware of a problem that a buyer would want to know about.

9 comments on “Property Disclosures
  1. T – The No Duty to Disclose section does not mention murder specifically as something that is exempt from disclosure. There’s a big debate about that right now because a purchaser of a property didn’t know about a recently committed murder in a home they purchased until after closing. They are currently in a law suit over the issue.

  2. Rob says:

    You wrote “So if there is a house that has had 5 owners in five years and in each case a family member who has lived in the house committed suicide in it and then killed another family member it does not have to be disclosed.” Killing another family member *after* committing suicide is pretty challenging, don’t you think? Or was that a segue into the “paranormal activity” clause?

  3. teresa boardman says:

    Rob – it has been my experience over the years that people really don’t read that closely. I often put little ideas in my blog that don’t make sense like someone committing suicide and then killing someone else. It was on purpose and I am astounded that anyone notice. Laughing very hard. Thanks.

    Aaron – no it is not specific to murder. I just used murder as an example. Honestly I think some of our forms are silly.

  4. Steve Trang says:

    MN statute 307.08 is now added to my top 5 favorite statutes. What would you say if you saw this as a buyer?

    We have a similar situation in AZ where you can’t disclose felonies or deaths. Then on one of my listings, neighbors pointed out that one of our most famous murders in state history involved that house to the potential buyer. I know I was furious after that, especially since it caught me off guard. In the end, it was worth only a $5000 price reduction.

  5. Patsy Snyder says:

    Regarding your comment where Sellers lied to you regarding their disclosure of problems or defects on the Seller Disclosure, one might consider developing a policy of never being present when Sellers fill out the form. Like you, I would not want to represent people who lie to me or to anyone else but, more than that, I do not want to be accused of having anything to do with the document itself. In this regard, it is good to have a policy of never being present when this document is filled out. Part of this policy would be to explain only the questions they must answer, not the answers themselves. A policy would be established if you could show that you NEVER were present when any Seller filled out the Disclosure document. We sometimes forget that we must protect ourselves from the public, and, sometimes, from those we represent.

  6. Steve Trang says:

    In real estate school all those years ago, they told us specifically to NEVER help your seller with these documents. Oh how I love our litigious society….

  7. Steve, Patsy – I agree. When I said help them my sellers sometimes ask what is meant by a question in the disclosure as in they don’t know what they are being asked. I explain the question I don’t make suggestions as to how they should answer it. I had one client who was visually impaired. I had to read the questions to her. She was able to check her answers if I put my hand on the form so that she could tell where the answer goes. Often I email the disclosure to my seller and I get it emailed back but it doesn’t always work that way.

  8. Joy Naylor says:

    I’m a realtor here in Cincinnati, OH (R.L. Higgins Real Estate – http://www.rlhiggins.com). We have the property disclosure here also but it’s not as detailed as Saint Pauls. What I offer my colleagues in the area is that I’m also the founder of the ParaResearch Foundation and also the director of a paranormal investigation team, Cincinnati Area Paranormal Existence Research (CAPER – http://www.caper.pararesearch.org). My question is if buyers/sellers should begin to use this type of services?

  9. I agree and you have a point there. Very interesting concept.

    Deirdre

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Teresa Boardman
Realtor®, MN,
Licensed Broker
Saint Paul Home Realty
651-216-4603
teresa(at)tboardman.com
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