Buying or selling a home is often the biggest business deal folks in Colorado are involved in. Considering the amount of money changing hands, the buyer and seller must do their research, fill out the paperwork and consult with experts if there are any questions or concerns.
Colorado is one of many states that requires a seller’s property disclosure agreement, which is a document that itemizes the health of the property by posing a series of questions. The seller is obligated to answer these questions truthfully to the best of their knowledge, but they also must be accountable for answers they should know as owners but did not. If this is done right, the agreement may protect sellers from litigation at a later date or buyers from paying full price for a defective property or buying the property at any price.
Common issues covered
The property’s condition includes such details as:
- Defects: These can be patent (obvious) defects like a crack in the foundation or latent (somewhat hidden) defects like asbestos insulation or lead paint.
- Potable water source: Cite where the property’s drinking water comes from.
- HOA: The buyer must know the property is part of a homeowners’ association
- Transit projects: The seller must divulge if there are any planned transit construction projects.
- Surface and mineral rights: This involves third parties owning or leasing these rights on the property.
- Meth laboratory: The seller is obligated to make repairs and disclose if the property was previously a methamphetamine laboratory. They may also be liable for expenses incurred due to health-related injuries that occurred after the sale and associated attorney fees.
- Special taxes: The property may be in the geographic boundaries of a special tax district.
Other items covered include access and parking, appliances, safety equipment, electrical service, telecommunication, ventilation, and sewage system.
Legal guidance often necessary
As part of negotiating the transaction, real estate attorneys can be a tremendous help in addressing any issues that come to light due to the seller’s property disclosure agreement. Ideally, the two sides can resolve issues without going to court, but sometimes litigation is the only option for an equitable resolution of the matter.