Ron Wynn: Ready to sell your home? Here's the scoop on real estate disclosure and federal discrimination laws
A buyer is entitled to know everything a seller knows before making a commitment, with a few exceptions.
Many years ago, legislation was created to favor contractual "buyer beware" acknowledgments as a mandatory seller's requirement for the sale and transfer of a home or income property. The document was created to reveal the sometimes obvious and sometimes not-so-obvious issues of a property.
A buyer is entitled to know everything a seller knows before making a commitment, with a few exceptions. Although many items inadequately disclosed or not disclosed would rarely result in a major lawsuit, certainly an issue that involves drainage, mold, contamination or construction defects could be huge. Sometimes sellers are paralyzed understanding the disclosure process, worried to death about a future lawsuit.
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Staying out of trouble is really very simple. Disclose what you know, and certainly reveal anything that in any way might make the property less desirable, less sellable, less valuable, or prone to additional repairs, corrections or compliance approvals. Disclose rent-control violations, unpermitted additions or conversions, or simply anything done at the property not to code or in a substandard way.
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It all sounds very logical until you factor in fair housing laws and discrimination claims. Did you know that most groups of people assembled in one place who form a definable group of individuals most probably would feel violated being called out or described? Certainly, implying that a person or group of people in proximity to a property might account for an adjustment in value or desirability would be a violation.
Staying out of trouble is really very simple. Disclose what you know, and certainly reveal anything that in any way might make the property less desirable, less sellable, less valuable, or prone to additional repairs, corrections or compliance approvals. Disclose rent-control violations, unpermitted additions or conversions, or simply anything done at the property not to code or in a substandard way.
You also may not comment or use words in advertising, descriptions or disclosures that might suggest a property is either suitable or not suitable for people with a physical disability. Thus, to say a home is walking distance to a grocery store is discriminatory because it suggests the house is suitable for someone who has the ability to walk and would be less suitable for someone who cannot walk.
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One might suggest the same discrimination by advertising that a home is close to a Catholic church or synagogue, or in a Jewish-dominant community -- grouping people of the same religious beliefs and worship into a distinctive segregation.
One must be additionally mindful to not imply or suggest directly or indirectly that a home is "better-suited for" a family with children, seniors, people with or without pets, singles, gays, people in the military or people of a particular gender. To suggest a home is suited for a retired couple might be violating federal fair housing in two ways: "Retired" refers to a group of individuals, as does the word "couple."
Ads might encourage certain types or groups, but an ad can just as easily discourage others who don't belong to the suggested or noteworthy groups. What happens if a potential buyer loses a golden opportunity to buy a real estate gem because he or she was discouraged, and it turned out to be the greatest investment of the year? They might respond to a less pointed ad. "Kid-friendly" can also discourage those without kids. Even that is too people-specific.
Back to disclosures: One may not describe a recovery home or rehab home in the area; or a home that is a shelter of sort for smokers, drinkers, children, homeless people, disabled people, mentally challenged people, physically abused people, physically challenged people -- and the list goes on.
Understand that discrimination is about describing people. Suggesting that a home or lifestyle is better or not as well-suited because of the existence of any human or group of humans is a violation. Even describing the awareness of a sex offender or someone who was released from prison will likely violate fair housing laws.
For more information, Google fair housing laws, or speak with a real estate attorney.
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