To Sign or Not to Sign?

Understanding the Seller's Property Condition Disclosure Statement

In my experience, a disproportionate share of claims against Agents arises from the misunderstanding of the benefits of the SELLER'S PROPERTY CONDITION DISCLOSURE STATEMENT.

Agents typically are brought into a post-closing lawsuit because of a hidden defect that the Seller failed to disclose. And, typically, the attorney filing the claim adds a count against the perceived “Deep Pocket” Agent asserting a violation of New Jersey’s Consumer Fraud Statute.

The NJ Consumer Fraud Statute can expose the Agent to treble damages and attorney’s fees.

Our State Legislature, however, created a “Safe Harbor” provision for Real Estate Agents provided that the Disclosure Statement is properly completed.

Your signature, as a listing agent, on a Seller’s Disclosure makes just two representations:

1. The information found in the Seller’s Disclosure “was provided by the Seller” -i.e., you are not making any representation in a Seller’s Disclosure.

2. After receiving the Seller’s Disclosure, and prior to providing it to the Buyer, you made a visual inspection “to ascertain the accuracy of the information disclosed by the seller”.

**Always insist on an executed Disclosure Statement, always conduct a post signatory inspection, and always sign the statement.

Questions? Concerns? Comment Below.