20 Problems You’ll Need to Note in a PA Seller’s Disclosure

20 Problems You’ll Need to Note in a PA Seller’s Disclosure

Posted on Aug 13, 2020

In Pennsylvania, home sellers are required by law to disclose the condition of their home. 

If you’re getting ready to sell your home, you may be wondering just what your legal obligations are when it comes to disclosure. 

Do you need to let the next homeowners know that your basement flooded? 

What about the contract work you had done in the master bathroom?

The short answer: homesellers are required to inform potential buyers of all known defects with their property, including defects that may be hidden from the naked eye (like electrical or roof issues). Failure to do so can lead to expensive litigation - on top of the cost of fixing the problem itself. 

What Exactly Does a PA Seller’s Disclosure Cover?

So how do you know what’s considered a “defect?” 

Under Pennsylvania law, the Disclosure Statement makes clear that a “defect” is a problem that would have a sizable impact on a home’s value or creates unreasonable risk. In other words, something like a missing section of baseboard wouldn’t be included, but a rotting roof would be. 

These are the exact topics that the State Real Estate Commission includes in the seller's disclosure document:

  1. Seller's expertise in contracting, engineering, architecture or other areas related to the construction and conditions of the property and its improvements.
  2. When the property was last occupied by the seller and zoning
  3. Condominiums/planned communities/HOA
  4. Roof and attic
  5. Basements and crawl spaces
  6. Termites/wood destroying insects, dry rot and pests
  7. Structural items
  8. Additions, remodeling and structural changes to the property
  9. Water supply
  10. Sewage systems or service
  11. Plumbing system
  12. Water heating
  13. Heating
  14. Air conditioning
  15. Electrical system
  16. Other equipment and appliances included in the sale
  17. Land/soils
  18. Flooding, drainage and boundaries
  19. Hazardous substances
  20. Miscellaneous threats to property

For a more in-depth explanation about each of these points, jump to the last section.

One of the most common questions listing agents receive about PA disclosure is, “do I need to disclose this? In most cases, it’s a situation of better safe than sorry.

“If you are on the fence about disclosing something, you should definitely disclose it because it can protect you from future liability. It’s always safer and better to disclose than to not disclose,” explains Houwzer listing agent Stephan Sitzai, who specializes in the Philadelphia market.

Disclosures Are Not a Substitute for Inspections

Buyers should do their due diligence when buying a home, considering it’s one of the largest investments of their life. A seller’s disclosure is not a substitute for an inspection, and shouldn’t be treated as one. An inspection can often - and typically will - uncover problems the seller wasn’t aware of. 

The seller’s agreement only contends with issues that the seller is aware of, or reasonably should be aware of. A home with a leak, for example, can reasonably be expected to have a bad roof.

Sellers are frequently advised to get a pre-inspection for their home so that they know beforehand what is likely to come up as an issue. Why not just wait for the inspection, considering the buyer will be less likely to back out at that point? A listing agent can advise the best path forward, but this way, sellers have a chance to fix the problem at their own pace, rather than having to pay premium contracting prices while under contract. 

Waiting for the inspection to reveal problems can lead to a hurried resolution and require the seller to drop the home’s price by more than they were hoping for.

A Disclosure Helps the Seller Protect Themselves

It’s not uncommon for homeowners to push back against their agent’s advice for disclosure. They, naturally, don’t want to jeopardize their home’s ability to sell - especially if it’s in regard to an issue they’ve already solved. However, disclosure is ultimately there to protect the seller as well. 

“Some sellers are hesitant because they think it will harm the potential salability of their home; you have to realize every home has problems,” explains Sitzai. “Even brand new homes have problems. And buyers realize that; It’s not going to make your home unsellable. You’re just protecting yourself by disclosing.”

In other words, noting something in the disclosure is unlikely to dissuade serious buyers, because every single house they look at has existing issues. They may not even care at all. But by informing them, you are actively protecting yourself from future litigation. 

What Happens if I Lie on the PA Disclosure Statement?

Many homeowners may be wondering what happens if they fail to disclose. It’s worth noting that, because the stakes are so high in real estate, litigation is fairly common. If you fail to disclose something important about your property, it’s very likely that you’ll either need to settle (which means paying to fix the problem), or hire a lawyer. 

Whether or not you’re found to be at fault will depend on whether the new homeowner can prove you reasonably knew there was an issue with the property. If there was water damage to a wall and you attempted to paint it over to hide it, that can be used as evidence against you. A claim can also be made using information gathered from your neighbors, insurance claims, and even utility bills.

If the court agrees that you are at fault, you can be held liable not only for the cost of repair, but for other damages the owner experienced as well. PA does not allow punitive damages for disclosure, which means that you won’t be asked to pay additional money as a way to “send a message” to other home sellers. In some of the more extreme cases, courts have allowed the reversal of a sale. 

PA does not require you, the seller, to pay the lawyer’s fees for the buyer if you lose, which helps to reduce frivolous claims. 

Under section 7311 of the law, a buyer has two years to bring legal action for a disclosure issue - so if you don’t want to be sweating bullets for 24 months, it’s best to be responsible and disclose what you know. 

Are Disclosures Still Required for Homes Selling As-Is or That Have Never Been Lived In?

Many sellers opt to sell a home “as is” to reduce the amount of time it takes to close the deal. These sellers are still responsible for disclosure. 

After all, disclosure doesn’t require the seller to fix the problem - you just need to inform the buyer it exists, so that they can make an informed decision about how much your home is worth.

The same goes for homes that the seller has never lived in: a disclosure is still required as part of the sale.

“Even if you’ve never lived in the home - if you’ve inherited the home, or if you’ve invested in it - there needs to be a property disclosure on file. Even if the answer to these questions is ‘I don’t know,’ you still need to have it,” explains Sitzai.

Can the Inspector or Agent be Held Liable Instead of the Seller?

Although it's their job to inspect the home for the sort of structural, electrical, and plumbing problems that would lead a buyer to sue, inspectors are rarely held liable for not uncovering something. Even in cases where it might be obvious that they didn’t do due diligence, home buyers often sign a contract with inspectors that limits the buyer’s ability to sue later.

Similarly, real estate agents cannot be held responsible unless they were informed of a major defect and chose to ignore it, or advised their client not to disclose it.

Unfortunately home inspectors can and do miss things; sometimes from simple oversight, other times because problems are deep within the home’s structure and extremely difficult to observe. This is why the seller’s disclosure is so important. 

What Won’t be Covered in a Pennsylvania Disclosure

Every state has a unique set of disclosure obligations. In PA, you are not required to disclose the presence of unsavory neighbors (no matter how loud they can get), deaths that took place in the home, crimes that occurred in the house, or paranormal activity. 

Disclosure also distinguishes between defect (required), and normal wear and tear (not required). An appliance or feature nearing the end of its usable life isn’t considered a defect. If you’ve had your HVAC system for 17 years, you know it’s probably going to need to be replaced soon; while this is useful information for the buyer, and helps determine the home’s overall value, this is not regulated by disclosure laws.

In other words, the disclosure statement is not a warranty.

Detailed Explanation of the PA Disclosure Form

1. Seller's expertise in contracting, engineering, architecture or other areas related to the construction and conditions of the property and its improvements.

In most cases, you would answer “no” to this section. The exception would be if you are actually an experienced architect, engineer, etc.

2. When the property was last occupied by the seller.

If you aren’t currently occupying the property, you’ll need to note why. This can mean the home has been empty, rented out, or if the property is an inheritance. Even if you haven’t lived in the home you still need to fill out the form to the best of your knowledge, and this may mean accessing any existing repair/maintenance records to see if you can fill in the gaps.

3. Condominiums and other homeowners associations.

You need to state whether your property is a condominium, cooperative or HOA (if it’s a HOA, you’ll need to note the annual or monthly fee amount)

4. Roof and attic.

You’ll need to note when the current roof was installed, whether that’s documented, and whether there’s ever been any issues with leaking. Not surprisingly, this is important to buyers since roof problems can be expensive to fix. You’ll need to disclose any issues with downspouts and gutters in this section as well.

5. Basements and crawl spaces.

When it comes to basements, the main concern is flooding. You’ll need to note whether you have a sump pump, whether there is any dampness, and whether you’ve ever done anything to control issues of flooding or dampness. Flooding and plumbing issues are among the most common disclosures - so even if you’ve had issues here, it may not matter much to the buyer

6. Termites/wood destroying insects, dry rot and pests.

Termites cause $5 billion in damages every year to homes in the US. You’ll need to note not only damages you’re aware of, but also note if you’ve had any pest treatments in the past five years.

7. Structural items.

Structural problems cover everything from a shifting foundation to wall deterioration. Past damage from a house fire or ice counts as a structural item. You’ll also need to note any external problems, like issues with driveways or patios.

8. Additions, remodeling and structural changes to the property.

Did you remodel the bathroom? Add on a bathroom? This is where you’ll disclose that. It’s important to note that DIY updates that turn out to have been improperly done often turn up as issues in disclosure, and work done without permits can raise red flags. 

9. Water supply.

Whether you get your water from a well, a community system or the public supply, you’ll need to note it here. For non-public water, you’ll need to disclose the most recent testing results. 

10. Sewage systems.

Is your property served by a sewage system (public, private or community) and when was it installed or connected? Any tanks, cesspools, or sewage pumps on the property need to be noted here.

11. Plumbing system.

Do you have PVC, copper, or lead pipes? Whichever it is, you’ll need to note it here. If there have been any issues with your plumbing - and this extends to things like your hot water heater and bathroom fixtures - you’ll have to make note of it. 

12. Water heating.

You’ll need to check off how your water is heated (whether that’s electric, natural gas, geothermal, etc) as well as record the number of water heaters and any existing problems.

13. Heating.

This section concerns your heating system - covering everything from fuel types (electric, geothermal, wood, etc) to system types (forced hot air, steam, radiant heat, etc). You’ll also need to note whether you have any chimneys, as well as their condition and whether they’ve been maintained.

14. Air Conditioning.

In this section you not only need to note what type of systems you have (central electric or central gas AC, for example) but you’ll also need to note which rooms of the property have no AC or heating. This section also covers water heating.

15. Electrical system.

Improper wiring or wiring not up to code are things that you would need to note under #11. Lawn sprinklers, smoke detectors, and security alarm systems also fall under this category, in addition to all the typical kitchen/washer appliances. You also need to note whether any appliances in the home are in need of repair, or total replacement.

16. Other Equipment and Appliances.

Every item that’s included with the property needs to be checked off here (as well as checked off if it’s not included). Items range from washers and dryers to pool covers and smoke detectors. Any issues or repairs with listed equipment also need to be noted

17. Land/Soils.

If you know your home has something like expansive soil - which can create foundational issues for homes, even if it hasn’t yet - you’ll need to note it here. This section also concerns property rights, specifically when it comes to natural resources. If there’s ever been a transfer or lease of oil or timber on the property, for example, you’ll need to note it.

18. Flooding, Drainage and Boundaries.

If you live within a flood zone or wetland area, this is the place to disclose that. The seller’s disclosure extends to other uses of property that would impact a homeowner’s experience. You’ll need to note any boundary disputes (such as your neighbor claiming that your fence is on their land, etc). If there’s a shared common area, like a driveway or a dock, you’ll need to both note the area as well as indicate any existing maintenance agreement you have with other homeowners.

19. Presence of hazardous substances.

This section pertains to hazardous substances like (but not limited to) lead paint, radon, and asbestos. If you’ve tested for these substances and the tests were negative, you’ll need to circle “yes.”

If your home was built before 1978, both the seller and buyer need to sign a lead paint disclosure that says lead paint could have been used on the property. This is a federal law and true for every state.

20. Miscellaneous threats to property.

This is sort of a catch all for everything else, and encompasses both liens and issues with the property’s title. In other words, if for some reason you’re not fully, legally entitled to sell the property, you’ll need to note it here.

This section also requires you to note any material defects with the property that were not covered by the rest of the form. If it can have a significant impact on the property’s worth, or presents an unreasonable risk to people living there, you still need to note it - even if it somehow didn’t come up anywhere else on the form.

The Seller’s Disclosure is a Normal and Expected Part of Selling a Home

Home sellers shouldn’t worry about having to disclose. It’s a completely normal part of the home selling process, and buyers expect to encounter these issues and are ready to deal with it.

“I’ve never come across a home without any issues,” notes Sitzpai. “The homeowner has responsibilities. If something goes wrong and it can be pinpointed as a longstanding problem, and they go back to the disclosure and they find that it wasn’t disclosed, there can be problems. Better to disclose it because while disclosure protects the buyer, it also protects the seller.”

Ultimately, seller disclosure laws help reassure homebuyers that they understand what they’re buying into, while protecting sellers against unwarranted litigation.

Have questions about what you are required to disclose? Contact one of our experienced listing agents today. They would be happy to answer any questions you have about Pennsylvania’s disclosure statement.

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