Friday, December 13, 2013

Can I get sued if my agent says to simply mark ‘unknown” on the disclosure form?


Yes you can get sued for failing to make a disclosure if a defect in the property relates to that category. Here is a reason why this is likely. Let's say you bought the house and the furnace proved to be defective. The owners, not being HVAC professions thought they could get away with checking off "unknown" on the disclosure statement. After all they aren't qualified to know if the heat exchanger is cracked. So far sounds good doesn't it. 

But let's dig deeper. The owners knew the furnace was acting funny, it wasn't producing the right amount of heat and their heating bills were increasing. There were other signs but we don't need to go into all of them. 

What the owners did need to disclose was their knowledge about the furnace not working right. And their knowledge is not unknown, in fact they know enough that any reasonable buyer would suspect more investigation was necessary. An HVAC inspection for less than $100 would have discovered the cracked heat exchanger and the owners would have been required to spend the $1,000 to repair it. 

So what we have is a seller failing to disclose their knowledge about the furnace and that is a violation of Iowa law. 

As a lawyer, my advice to the buyers would be so to sue the sellers for failing to make any disclosure as to their knowledge of the defective furnace, water heater, water softener, roof leaking, windows leaking or any other defect in the home’s systems. 

I know what the sellers will say when the letter arrives from the buyers' lawyer asking for reimbursement of the HVAC repair bill. "But my real estate agent said I can mark ‘unknown’ on the disclosure form."

Whose advice should you follow? It doesn't matter what the real estate agent told you to do when filling out the disclosure form. That is legal advice and to my knowledge there are very few real estate agents and brokers in Iowa who are also licensed attorneys. Real estate agents are not permitted to give you legal advice. This is legal advice. That and they will probably deny ever telling you how to mark the disclosure form.

Make sense? If not call us for a consultation.


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