Real Estate Blog
FULL DISCLOSURE
Posted on September 28, 2011 by Attorney Kevin Riley
Persons wishing to sell a home in Indiana should be aware of Indiana’s residential property disclosure laws. Under Indiana law, home sellers are required to disclose the condition of their home’s foundation, mechanical systems, roof, structure, and water and sewer systems. A property’s known hazardous conditions must also be disclosed. The disclosure is made on a standard form which must be completed, signed, and submitted to any prospective buyers before an offer for the sale of the home is accepted. Sellers may find a copy of the form on the State of Indiana’s website.
A homeowner who deliberately fails to disclose the items listed on the disclosure form or who misrepresents the condition of his home on the form may be subject to penalties. A recent lawsuit in Indiana involved sellers who failed to disclose a known recurring water problem in their home. Vanderwier v. Baker, 937 N.E.2d 396 (Ind. App. 2010). During the pre-sale inspection, the owners stacked personal belongings so as to hide water damage from the buyer’s home inspector. When this same water damage later befell the buyers, they sued the sellers for fraud and won. The sellers were responsible for paying to repair the damage and for replacing the buyer’s damaged property.
Despite the strict disclosure requirements under the law, a homeowner cannot be held liable for errors, inaccuracies or omissions on the sales disclosure form if the seller does not actually know about them. In another Indiana case, a home’s septic system failed after its sale. During a septic cleaning shortly before the sale, a septic servicer company reported to the seller that the septic system was functioning properly. In addition, the seller had never experienced problems with the septic system. In that case, the seller was not liable to the buyer for the failure of the septic system.
A seller’s disclosure form is not a warranty or a one hundred percent guarantee of the home’s condition. It is also not a substitute for any inspections or warranties that the prospective buyer may later obtain. Nevertheless, the owner must honestly disclose the condition of items on the form to the best of his knowledge. Sales disclosure forms are legally enforceable documents and therefore sellers and potential purchasers should consider consulting an attorney regarding disclosure requirements and consequences prior to the sale.
Reiling Teder & Schrier, LLC is an Indiana Limited Liability Company. The information contained in this website has been prepared by Reiling Teder & Schrier, LLC for informational purposes only, and is not legal advice. The information on this website should not be relied upon to make any decision, legal or otherwise. If you have any specific questions or inquiries regarding any of the information contained in this website, you should consult with an attorney licensed in your state. The information contained in this website pertains only to matters of Indiana law and the laws of other states may be completely different from the laws of the State of Indiana.
April 2011 -- Restrictive Covenants - Buyer Be-Aware
Posted on April 06, 2011 by Attorney Kevin Riley
Persons purchasing a home should carefully review any restrictive covenants applicable to the property they wish to purchase. Restrictive covenants, in the context of residential land development, are restrictions that govern the use and/or development of the property to which they apply. Often times, developers create and record restrictive covenants for residential subdivisions. Common restrictive covenants may include restrictions on the types of building materials that may be used on the exterior of a home, bans on conducting business in the home, parking restrictions, and rules regarding the construction of improvements such as decks, sheds, fences, and other similar structures. A homeowner’s failure to comply with the restrictive covenants can in some circumstances result in the assessment of fines against a homeowner by the board or entity permitted to enforce the covenants. In many circumstances these fines, if not paid, can result in a lien being placed on the property.Since covenants can be binding restrictions that are enforceable under the law, potential purchasers should consider consulting an attorney to review the covenants and answer any questions that the homeowner may have prior to purchase.
Reiling Teder & Schrier, LLC is an Indiana Limited Liability Company. The information contained in this website has been prepared by Reiling Teder & Schrier, LLC for informational purposes only, and is not legal advice. The information on this website should not be relied upon to make any decision, legal or otherwise. If you have any specific questions or inquiries regarding any of the information contained in this website, you should consult with an attorney licensed in your state. The information contained in this website pertains only to matters of Indiana law and the laws of other states may be completely different from the laws of the State of Indiana.
