Denver Real Estate Law and Family Law Blog. (Vol 1.37) June 15, 2014
By Craig Franklin Chambers Esq. 7851 S. Elati Street #204, Littleton, CO 80120
The Littleton Lawyer.
As a Colorado real estate and divorce lawyer, specializing in civil ligation, real estate law and divorce law in Littleton, Englewood, Lone Tree, The Tech Center, Denver, Highlands Ranch, and Jefferson, Arapahoe, and Douglas County, one of the biggest problems I come across is the failure of the Seller to fully disclose the condition of a home in a residential real estate transaction.
The Buyer expects the fundamental features of the home such as the roof, furnace, and structure to be functional, and he usually inspects them along with the cosmetics of the home in his home inspection. The problem arises when the home inspector misses problems, either through the negligence of the home inspector, or because of the Seller took efforts to hide or conceal the problems.
The question arises: What is a seller required to disclose when selling a home?
The Colorado Real Estate Commission requires a Square Footage Disclosure, a Source of Water Disclosure, and a Seller's Property Disclosure which may or may not be required as a part of the contract between the parties. The EPA requires a lead-based paint disclosure for houses built in 1978 or older. Some real estate offices require other disclosures such as disclosures for mold.
Usually a Seller can decline to provide these disclosures, or the buyer can waive them . This is common if the Seller is an estate, a bank, HUD, or a third-party relocation company, none of whom would have knowledge of the condition of the property.
Under Colorado case law, the only legal requirement of a Seller is that the Seller is required to disclose any latent defects of which he has actual knowledge. What this means is that the Seller's disclosure responsibilities are limited to defects not readily ascertainable by the buyer; and his disclosure is limited to defects of which he is actually aware. This is the basic legal disclosure requirement under Colorado law.
The best witness to prove a case for failure to disclose like this would be a neighbor, contractor, or similar third party who advised or assisted the Seller in discerning or covering up the problem. As you can imagine, as this type of case moves forward, a witness like this is usually hard to find.
The solution is to consider the disclosures of the Seller with a grain of sale. Have the home inspected by as many types of professional home inspectors as are appropriate for the property, and learn for yourself the condition of the home. And if the home fails inspection, no matter how much you like the home, don't be afraid to simply cancel the transaction and find another property.