Disclosures – Might as Well Tell the Truth

In the dictionary, “disclosure” is defined as the action of making new or secret information known. Having recently written a column about selling properties as-is, I thought I’d elaborate on the disclosures sellers are required to make in Mendocino County. Selling a property in its current condition isn’t the same as hiding information about its faults.

The state requires sellers to disclose any “material facts” that would affect a buyer’s decision to purchase the property or the price they would pay. It’s a bit vague, but since any material facts the seller doesn’t mention prior to the close of escrow can become the basis of lawsuits after the escrow closes, I always tell sellers to disclose anything they think might possibly be of interest to the buyers. If the information changes the price the buyers agree to pay, or if the buyers back out of the sale completely, the information was material. If not, no harm was done in disclosing the information.

To help define the information sellers should disclose, Mendocino County Realtors have collaborated with our state professional association to create an 11-page document outlining everything from whether the property is within 300 feet of an industrial or agricultural site, to whether a property is in foreclosure (and therefore a huge pain to deal with). If you’re thinking of buying or selling a house, here are a few issues to consider. For a comprehensive list, talk to your Realtor.

The Mendocino County disclosure starts with an acknowledgement that buyers receive booklets about toxic mold, lead, earthquake safety, and energy ratings. And it only gets more exciting after that. As dull as some of this information may seem, it is essential to carefully review it.

Be sure to pay attention to the disclosure about proximity to industrial or agricultural properties. Be aware that your dream of a quiet, peaceful homestead could be shattered by the clanking of a harvester at 6:00 am or bright lights flooding your bedroom in the middle of the night from a factory’s 24-hour work cycle. If your property is near an agricultural site, the standard disclosure says you may be “subject to inconvenience or discomfort arising from use of agricultural chemicals, and from the pursuit of agricultural operations including, but not limited to, cultivation, plowing, spraying, pruning, harvesting, crop protection, which occasionally generate dust, smoke, noise and odor, and protecting animal husbandry from depredation.”

Being close to an industrial site has similar downsides. The disclosure says you may be “subject to inconvenience or discomfort arising from the use of machinery, and from the pursuit of industrial operations including, but not limited to, assembly, manufacturing, cutting, drilling, machining, metalworking, milling, punching, “tapping”, soldering, transportation of materials and goods, and welding. All of these activities, and others not mentioned in the non-exclusive preceding list, may generate light, glare, dust, smoke, noise and odor, all of which may occur 24 hours a day, 7 days a week.”

If your property is in the middle of nowhere, far from farming or industry, it may be harboring endangered species or include dead or diseased trees, both of which can lead to significant costs. The disclosure says, “The presence of a listed [endangered] plant or animal on the property can have serious consequences…including but not limited to prohibition or limitations on building, remodeling, grading, landscaping, and agricultural, livestock, and equestrian activities, and costs relating to governmental requirements for environmental mitigation of the effects of buyer’s plans or activities.”

You can see, there’s a lot to think about and I’ve barely scratched the surface. I haven’t even begun to talk about issues related to sewer laterals, underground utilities, storage tanks, septic systems, short sales, mother-in-law units or naturally occurring asbestos. As I said, talk to your Realtor for details.

If you have questions about real estate or property management, please contact me at rselzer@selzerrealty.com or visit www.realtyworldselzer.com. If I use your suggestion in a column, I’ll send you a $5.00 gift card to Schat’s Bakery. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.


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