If you are selling your house and want to stay out of the courtroom, there are certain things you have to disclose according to the state you live in. This will ensure that the buyer knows what they are getting into when they purchase. If you plan to buy and sell properties regularly, be open and honest will enhance your reputation as someone who is trustworthy.

General Things to Know

You should be aware that doing things to hide structural damage/defects or environmental hazards is illegal. If you never knew a problem existed, then you may or may not be held liable in certain instances, depending on whether it was something you should have noticed, but you wouldn't be held criminally negligent.

If you suspect something could end up being a problem, it is better to disclose your concerns to avoid future liability even if you chose not to correct the situation. For this reason, it is wise to hire a professional home inspector to look over the property to become aware of potential problems. These disclosures may not discourage the buyer who may be willing to take on the repairs, and they could become a bargaining points when negotiating and accepting an offer.

Structural Damage or Defects

Since laws differ according to state, you should consult your real estate agent or a real estate attorney for specifics. Things you should definitely disclose are:

• Any problems with plumbing or sewage.

• Insect infestations

• HVAC issues

• Problems with the roof

• Drainage issues

• Water leakage and basement issues

Environmental Concerns and Hazards

One hazard in particular that you need to disclose is the presence of lead paint in houses that were built before 1978, according to a federal law commonly referred to as Title X.

This requires you to:

• Make a disclosures about any known lead based paint/hazard in the property,

• Give the buyer ten days to have testing done, and

• To make and keep a signed statement (by both parties) about the disclosure and requirements for three years following the sale.

You must also give the buyer a copy of the EPA pamphlet Protect Your Family from Lead in Your Home.  It should be noted that lead hazards include not only paint but in the plumbing as well.

Other hazards that you should disclose if present include:

• Mercury,

• Asbestos,

• Radon,

• Formaldehyde, and

• Carbon monoxide.

If there are any known off-site problems that could affect the health of the person buying the house or lower the value of the property, these also should be made known to the buyer. Some of these include being in close proximity to a treatment facility or plant that causes waste hazards, or puts off pollutants/contaminants that affect air quality, water, or soil.

Also, any local natural hazards should be disclosed including: seasonal flooding, earthquake dangers, susceptibility to wildfires.

Title Issues, Neighbors, and Spooky Stuff

If there is any issue regarding the title to the property, this must be disclosed and remedied if possible. If you have had serious issues with any of the neighbors, the buyer should also be made aware of this.

A property may be considered "stigmatized" which could affect its value in the area and this could result in a civil action if you don't disclose it. Things that commonly do this are: the fact that a suicide, murder, or other violent death occurred in a house, or paranormal activity has been reported and documented there. On the other hand, some buyers are attracted to these things, so a discussion about this could increase the chances of a sale.

A death may only need to be discussed legally if the location of the property or a condition of the property caused it. An example of this is when the house was formerly a known location for drug activity.

If a death occurred in the home due to natural causes, it should not be disclosed for health privacy reasons, particularly if the condition was HIV/Aids.

To Sum Up

You should make disclosure of any property condition that has any of these elements:

• It lowers the value of the property,

• There are federal regulations about its disclosure,

• It could possibly be hazardous to the buyer's health, mental well-being, or life, and/or

• It includes repairs that need to be done.

The buyer should be made aware of these issues (in writing), perhaps by a realtor, to protect you and them. Honesty about these things enhances your reputation, protects you from legal action, and will help a buyer to be feel satisfied with his/her purchase.