Walking the Line: Nevada/California Seller’s Real Property Disclosure

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There have been several issues lately regarding proper disclosure on the Seller’s Real Property Disclosure (SRPD) for Nevada and the Transfer Disclosure Statement and Seller Property Questionnaire (TDS and SPQ) for California. This has brought up the question: How far should a seller go back to disclose issues that have affected their house?

The answer is simple, there is no time frame. The seller should go back from the day they bought the house and if there were items that they were made aware of by a previous owner those items should be included as well.

Items discovered after closing Items that were not disclosed by the seller(s):

  1. Well issue with the quantity of water – Buyer purchased property actually had the well tested but when they took a shower and watered the lawn there was not enough water. Seller(s) had the well cleaned and sand removed 3 years prior but never disclosed to the buyer that there had been a need to clean out sand build up.
  2. Pet urine – Seller had several cats and the carpet was cleaned after the close of escrow which made the urine odor come out. There was urine everywhere, carpet, drapes, heating vents, walls, baseboard and sheet-rock. The estimate to repair was over $50,000.00.
  3. Well issue with the quality of water – Water was tested and there was no issue. However the listing agent took the water sample from the kitchen which had a reverse osmosis system under the sink. The sample should have come from the well or another faucet that was not filtered. Seller(s) did not disclose any thing about the quality of the water.
  4. Seller was a flipper – a new roof was put on the house during the updating process, the Seller disclosed the age of the roof as “unknown” even though they had owned the property less than a year. Buyer and Buyer’s agent were told it was a new roof and did not question the contradiction on the TDS. When investigated after COE it was discovered that the roof had been replaced without permits and was not properly installed.
  5. Irrigation Ditch running through property – Seller failed to disclose that they had not paid to draw water from the ditch for several years. Buyer was unable obtain a new hookup to access ditch water due to moratorium from water district. Buyer was from out of area, had livestock and was relying on ditch water access for irrigation.

Rule of thumb should always be, “when in doubt, DISCLOSE!”. Be sure the Seller understands the importance of disclosing and that there is no time frame or statute of limitation. In Nevada if it ends up in court the seller(s) could be responsible for three times the damages. In California there are severe penalties as well for failure to disclose and the Agent for the Seller can be held accountable for the Seller’s failure to disclose in certain circumstances. If it does end up in court then everyone will be a part of the law suit.

Remember these forms do not ask ALL the questions the Buyer may have or need to know so be sure to ask for answers in writing and get the answers in writing! A year or two later in court no one remembers phone conversations!

 

Written by Ron Hoy, and Linda Kaneko, Select Group Real Estate. For questions or further information email Ron at Ron.Hoy@cbselectre.com or Linda at Linda.Kaneko@selectgroupre.com.

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