Property Disclosures in Las Vegas: The Truth Is Sexy

So you’re ready to put your home on the market here in Las Vegas? As a seller, it is your legal (and moral) obligation to provide all prospective buyers with a seller’s property disclosure. Gone are the days of "caveat emptor," or "buyer beware." Sellers must fully disclose any known problems with the property and any repairs that have been performed on the property as well. Lawsuits stemming from this issue have been on the rise over the years, so it is important for sellers as well as real estate agents, to have a firm understanding of disclosure statements. This also includes repairs performed by the previous owner, assuming you are privy to this information.

I believe a lot of sellers simply don’t understand the extent of what must be disclosed to potential buyers.  For instance, a property repair, which is a common part of home ownership, must be disclosed, even if the problem has been resolved. For instance, if the roof leaked 8 years ago, and subsequently you repaired the shingles, it must be disclosed. Even if it has not leaked since the repair, and even if the ceiling drywall has been replaced.

Any prior issues with pests, in particular termites, should be included obviously. I’ve listed a home that previously had termite issues. The seller simply provided a receipt of the work performed and then a new inspection which showed the home was now termite free. If I recall, he also included a pest control plan (for a year) for the new owners. With adequate paperwork outlining the problem, and then the solution, the buyers went ahead with the purchase.

Keep in mind too that deceptive practices often come out in the wash. Sometimes before closing and sometimes after closing. Prior to close, the buyers may simply walk. They may also ask the sellers to repair the issue or give them a credit at close. After close, it may not be as easy and you may be facing litigation. For instance, I’ve had home owners be dishonest with me about delinquent HOA dues, as well as property taxes. These were uncovered during the title process, and were taken out of escrow proceeds. Like I said, it all comes out in the wash.

Much like deficiencies coming to light through a title search, a good home inspector can also spot previous repairs that may not have been disclosed. Even damage that had been painted over, can still be found during an inspection.

Water damage and mold are some of the bigger issues that come up and they are also one of the leading causes for litigation. If it is a persistent problem, it most certainly will arise again if not addressed. Hiding something, rather than fixing it, is the last thing a home owner wants to do.

Also, it’s important to note, that if something is uncovered during the inspection process that you were not aware of, and the house does not sell, you must now add that to the property disclosure. I had a seller once, whose condo inspection turned up a couple of issues. It showed an air handler in need of replacement and water damage in the closet. He knew about this, but didn’t tell me, or disclose it. While these weren’t serious issues (he pleaded ignorance, but there was no way he didn’t know, since the water damage was “fixed” with a poor repair job) the buyers decided to walk. Because of this discovery, he was now obligated to update his property disclosure form. For some reason, he decided he would not repair either issue, nor was he interested in updating the disclosure. We parted ways after that.

In addition, a note on “As Is” properties: If you are selling a home in "As Is” condition, then that does not excuse you from disclosing issues that are known. In fact, I’d say it’s the exact opposite. The home is sold “As Is” and here are the known issues, take it or leave it.

I always find it interesting when I see a property disclosure that lists zero issues and repairs. I guess it must only be my home that needed repairs over the years? How ever does Home Depot stay open? Claiming a property has been trouble free for the last ten years isn’t very realistic and it’s also a good way to set you up for a lawsuit.

These days, I really believe it pays to be as honest and upfront as possible. Being truthful is sexy. It immediately establishes trust, allowing the parties to move forward together, and also protects you from any liability later down the road.