Seller Disclosures and The Home Inspector

Should seller disclosures be provided to the Home Inspector? Sellers are required, by law, to properly disclose known issues with the home as a part of the listing.  Roof leaks, termite infestation, faulty plumbing, mold, structural issues or deficient appliances are common issues which the potential buyer must be aware of. Some refer to this as the “Money Pit” law.  Disclosures can also include known sinkhole activity, disputes over property boundary, HOA/COA fees, claims or court proceedings, tax disclosure, code or building permit violations and “significant history” such as criminal activity and even paranormal activity.   Note: Florida law does not require the Seller to disclose if the property was inhabited by a person with HIV or AIDS or, that a murder or suicide occurred on the property, even if asked by the buyer. Florida law provides seller disclosures may be provided either orally or in writing although realtors are expected to insert all disclosures in the disclosure listing.  Sellers are only required to disclose issues which they have actual knowledge of.  Sellers are generally not responsible for defects they “should have known about”.  This is the gray area and it is not as cut and dried as one may expect.  In Jensen v. Bailey (Fla. 2nd DCA 2011), the buyers sued the seller after discovering alterations did not meet building code.  The seller affirmed in their disclosure that no additions or alterations to the dwelling violated building code.  The Seller prevailed as the court ruled they were not aware of the condition as they had left the permitting responsibility with their contractor (who did not pull a permit).  I find this interesting because we also have laws against unlicensed contracting which also requires the owner to verify their contractor is properly licensed and the job is properly permitted/inspected.  Florida courts seek to protect home sellers from unnecessary litigation and Sellers are not expected to guarantee their properties are defect free which is considered to be an impossibility.  I am a very good home inspector and I do not guarantee I will find all defects – it is simply not possible. What prompted seller disclosures?  California was the first state to require seller disclosures in 1985.  This requirement followed the 1984 case of Easton v. Strassburger in which the court ruled in favor of the buyer who sued claiming the seller and the realtor failed to disclose known structural deficiencies with the home. The National Association of Realtors (NAR) quickly incorporated seller disclosures into their regulations and today it is included in all real estate residential sale contracts that I am aware of.  Prior to this court case, seller disclosures were “voluntary” and we operated on the legal premise of “caveat emptor”.  Our Florida “As-Is” contract also requires seller disclosure (I find many realtors do not realize this and bank owned properties routinely fail to disclose known conditions – they know the condition of the property!). Ok, we have a court case which absolved the seller and a court case which ruled in favor of the buyer.  Where does this leave us?  The operative basis which decides culpability is “Florida home sellers need only disclose what they know”.  If the buyer sues the seller claiming damages from defects discovered after the closing, the buyer must demonstrate:
  •                 The seller knew about the defect. 
  •                 The defect had a substantial impact on the value of the property.
  •                 The buyer did not, upon purchase, know about the defect.
  •                 The defect was hidden and not easy to detect.
  •                 The seller did not advise the buyer of the defect.
With this background, let’s address the question at hand – Should the Seller’s disclosure be provided to the home inspector?  Before we answer this, let’s discuss what advantages there may be in doing so:
  •                 It would alert the home inspector of the issue.
  •                 It would allow the home inspector to devote more time toward the issue/issues.
  •                 It certainly promotes better disclosure and may provide the seller with a better defense against a future claim.       
What are some disadvantages in providing disclosure to the home inspector? If the home inspector has prior knowledge of an issue, the line becomes blurred in distinguishing between inspector issues and disclosure issues.  This gray area could actually absolve the seller of obligations that rightfully belong to them.                 The disclosure could involve missing building permits, code violations or environmental issues outside the scope of a home inspection.                 Most home inspections are visual and non-intrusive.  Having prior knowledge of a hidden issue should alert the home inspector he may be at risk of additional liability.                 The buyer may be mislead into thinking the home inspector has covered all disclosure issues.  Note:  Many courts use the general rule, if the purchaser undertakes their own independent investigation of the property, and the seller does not hinder that      investigation, the purchaser will be deemed to have relied upon their own investigation, and not upon any representations made by the seller.  This is called the “independent investigation doctrine”. So, who benefits from the home inspector receiving a copy of the seller’s disclosure?  Possibly, the seller. Disclaimer:  The author of this paper is not an attorney and this article should not be considered or used as a legal basis.  If you are faced with any disclosure issues, you should consult with an appropriate attorney regarding the matter.  

William Chandler

 The Building Inspector

 Licensed Mold Assessor

 Certified General Contractor

 Licensed Pest Control Operator

 Board Certified Indoor Environmental Consultant


You don't have to choose the most qualified inspector, but it does help!