Real Estate Buyer Beware - What You Don't Ask May Come Back to Haunt You
October 5, 2005
When purchasing property, most buyers consider such things as the neighborhood, school system and the fair market value of the property. However, how many consider whether or not a felonious act, such as murder or suicide has occurred on the property? How about if a registered sex offender’s residence is in proximity to the property? What may be the legal implications of these facts, and whose duty is it to investigate or disclose this information?
The answer to these questions may be surprising.
Thirty states have disclosure statutes covering the sale and transfer of real property. Generally, real estate brokers are required to inform potential buyers of any material defects in the property for sale that a) the broker knows about; b) are not readily apparent to the buyer; and c) would affect the potential buyer’s decision to purchase the property. These statutes are, for the most part, limited to material defects, such as leaking roofs, foundation problems, and intermittent basement flooding.
Non-material defects are sometimes called “psychological impacts” or “psychological impairments” and can include things such as a murder having taken place in the home, the presence of high crime in the neighborhood, barking dogs, a neighbor with a penchant for loud, midnight parties, or future plans to build a nearby power plant. Many states have passed statutes that define psychological impacts as non-material defects, effectively exempting sellers and brokers from having to disclose them. Massachusetts does not follow the majority of states regarding disclosure statutes. In fact, ...
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by:
Todd C. Ratner
BusinessWest
August 22, 2005
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