A property owner considering a “for sale by owner” transaction could have several legal issues to resolve. Price is an important factor when creating a purchase agreement and a professional appraisal may provide a seller with an advantage when negotiating a transaction. Without revealing material or other defects, however, a seller may face a damages suit if a buyer discovers undisclosed issues after taking possession.
When an interested party makes a written offer to buy a home, Oregon law requires a seller to provide a property disclosure statement. A seller must provide one even when a buyer conducts their own professional property investigation. A buyer has the right to rescind his or her offer without a disclosure form.
Contents included in a disclosure statement
Before a buyer agrees to follow through with a transaction, he or she has the right to know about any potential problems. As noted by OregonLaws.org, a property disclosure statement must provide information to a buyer about any potential problems or needed repairs. This may include matters involving plumbing and sewage, structural issues, electrical wiring and HVAC systems.
Material defects and environmental hazards
Sellers need to ensure they disclose all known material defects about a property before the closing. As described by the International Association of Certified Home Inspectors, the term “material” describes an issue or a defect that could significantly affect the property’s value.
As noted by the U.S. Environmental Protection Agency, a seller must also reveal issues concerning a property’s structure or its impact on the environment, such as hazardous lead paint. Leaks from an underground oil tank could also have a negative impact and cause serious damage to neighboring properties.
