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Wednesday, December 12, 2012

Should a Seller Disclose a Landfill or Railroad Track?

Should a Seller disclose a landfill near or adjacent to the property to potential buyers?  What about an active railroad track near the property?  What about a murder, a suicide?  YIKES!
 
What Does Georgia Law Say Regarding Disclosure?
Georgia Law requires sellers to disclose material information about a property to prospective buyers or tenants.   Generally, the courts have held that whatever is material to the buyer or tenant is, in fact, material. Licensed real estate agents in Georgia must disclose anything that would affect the buyer's desire to purchase the property or how much they are willing to pay for it.  That said, Fair Housing Laws would not permit any illegal disclosures as to race, color, religion, sex, or national origin, but also based on familial status and handicap.
 
What if a Rape, Murder or Suicide was Committed on the Property?
If such a terrible act were committed on a property, the seller is not required to disclose these facts- unless asked directly.  Then, the seller must disclose the information to a potential buyer.  Properties with such a grisly history are considered "psychologically impacted". 
 
What if Someone Died in the Property?
If someone died in the property from AIDS, then the seller or agent is not allowed to disclose-even if asked directly.  The appropriate response if asked would be "I am unable to answer this question, by law".  The reason for this is that AIDS was deemed by the courts to be classified under the protected handicap status and thus  protected under Fair Housing Laws which make discrimination illegal.
 
What if the House is Haunted?
I know, this would have been a good Halloween article, but maybe I will "revive" it again later, but the answer is MAYBE.  I have heard of a Seller in New York losing a lawsuit over non-disclosure to the buyer of his house that it was haunted.  The plaintiff didn't have to prove the house was haunted, he proved that the Seller had told all the neighbors the house was haunted to the point of publishing an article about the hauntings, which proved the Seller believed the house to be haunted- thus diminishing it's value to prospective future buyers. 
 
Does GA Law Require Purchase Contracts to Include a Seller's Property Disclosure Form?
No, a Seller does not have to attach the GAR form Seller's Property Disclosure Form, however, it is a great form that will help jog a Seller's memory in great detail to provide necessary disclosures to all prospective buyers.  It is a CYA at it's finest.  And it's important to be truthful and forthcoming to protect yourself legally after the transaction.
 
Are Disclosures Provided to Buyers Purchasing Short Sales or Foreclosures?
Yes in a short sale and usually no in a foreclosure.  If a Buyer is buying a short sale, the property is still owned by the Seller who is required to make disclosures.  In a foreclosure, the BANK owns the property and is completely unfamiliar with the history of the house, so they generally make NO disclosures.  Buyer Beware!
 
Apply the Golden Rule
I believe you should disclose anything that you would want to be disclosed to you.  If you do that, you're usually covered pretty good.  And it generates good Karma, because as you sell one house, you're usually buying another, and you would want to know if there is an active railroad track on the back of the property.  (But do yourself a favor and do a LOT of homework and your own investigation during your due diligence period of buying the hosue....just in case).

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