So you have received good response from buyers after putting your residential property on the market, and even negotiated a deal. Everything is going well and now you are ready to draft a contract. But wait; have you fulfilled all the pre-contractual disclosure obligations?
Pre-contractual disclosure refers to the information that sellers have to disclose to prospective buyers under the Illinois Residential Real Property Disclosure Act. If you fail to do so and the buyer discovers damages after the purchase, they can sue you for not disclosing this crucial piece of information.
How To Make The Disclosure?
The procedure for disclosing information about a residential property varies among different states. However, the easiest way to fulfill this requirement is to use seller disclosure forms. They contain a long list of questions regarding the damages in the property. Each question must be answered with “yes”, “no”, or “don’t know”. There is nothing wrong with answering a question with “don’t know” because you are only required to disclose information that you are aware of. After filling this form, you will be required to attach it to the sale contract.
What Information Does The Seller Need To Disclose?
The seller is required to disclose any information that may influence the buyer’s decision or price of the property. Generally, the seller should disclose the material facts and the possible defects that affect the structural integrity of the property. Some defects that are necessary to be disclosed include:
- Roof defects
- Any type of water leakage
- Foundation instabilities
- Property drainage problems
- Sewage and plumbing issues
- Infestations
- Air conditioning or heating system issues
- Any toxic materials used in the construction
The best way to know which information you are legally required to disclose to a buyer is to consult with a real estate attorney.
Consequences Of Not Fulfilling Pre-Contractual Disclosure Obligations
The most probable course of action the buyer will take after discovering the defect(s) is to sue you and hold you responsible for the costs of repairs and other damages incurred. There are chances that the seller might have to take the house back if a judge invalidates the sale. Not only that, such lawsuits can break your bank, as the seller is entitled to pay the fees of the buyer’s lawyer, along with punitive damages if there is any kind of fraud involved.
Hire a Real Estate Attorney to Save yourself from the Trouble
Most sellers are unaware of the Illinois Disclosure Act, and end up being sued by the buyers for not providing full disclosure. This happens because people try to save money by not hiring a reliable and experienced real estate attorney who could’ve guided them about legal implications of not fulfilling pre-contractual disclosure obligations.
If you have any questions, contact our experienced Naperville real estate attorney from the Fitzgerald Law Firm, P.C., to schedule a free consultation today.