By John Stemlar
Anyone who has bought or sold a home is familiar with the Seller Property Disclosure Statement. This form is designed to help sellers disclose to buyers known property defects, as required by law. The form, a detailed checklist, gives the impression that Georgia law imposes a high disclosure standard. The disclosure standard is actually very limited.
Georgia adopts a modified caveat emptor (or “buyer beware”) disclosure standard. This means that a homebuyer is responsible for learning the condition of the property. The law, however, requires a seller to disclose to the buyer any known latent property defects. A defect is an adverse condition that a reasonable homebuyer would consider in a purchase decision. A defect is latent if a buyer could not be expected to discover it in a reasonably diligent inspection of the property. For example, a crumbling foundation is a defect. If it is hidden behind a finished wall, it is a latent defect which must be disclosed by the seller IF he/she is aware of it.
The Seller Disclosure form encourages disclosure well-beyond what the law requires. Most would agree, however, that over-disclosure is better than under-disclosure. Not disclosing adverse conditions, latent or not, only invites problems. Deliberately misrepresenting (or concealing) an adverse condition of the property, of course, is fraud.
There is no legal requirement to complete a Seller Disclosure form as part of a real estate transaction. As a practical matter, however, Buyers expect to get one. An exception is where the seller has limited knowledge of the property. A foreclosure or estate-owned property, for example, is often sold “as is” and with no disclosures. Even with these types of properties, however, the legal requirement to disclose known latent defects remains.
Legal considerations aside, the Seller Disclosure should be considered a “sales document.” A thoughtfully completed, accurate and professionally presented Seller Disclosure gives prospective buyers confidence in the quality of the home and the care the owner has given it over the years.
John Stemlar is a Principal and the Managing Broker at Sage Real Estate Advisors, a boutique Atlanta residential brokerage. He promotes the Lynwood Park neighborhood and the homes for sale in Lynwood Park at www.LynwoodParkHomes.com