Buyer Beware

November 4, 2009

By: Bridget Gallagher

Connecticut's Residential Property Condition Disclosure Reports

If you have bought or sold a home recently you probably had a Residential Property Condition Disclosure Report attached to your purchase and sale agreement. What exactly is the legal effect of this document?

In 1995, the legislature passed a statute which requires that sellers complete the disclosure report when selling a one to four-family residential property. There are certain exceptions, such as sales from an estate. If the sellers are required to complete the report and fail to do so, they are subject to a $300 penalty to be paid to the buyer at closing. Some unscrupulous sellers may prefer to pay the $300 penalty rather than disclose a leaky roof that will cost $3,000 to repair. A buyer should therefore insist upon receiving a completed disclosure report when the contract is signed unless the seller is exempt from compliance.

But what assurances does the report really give a buyer? The law specifies that the seller's representations only need extend to seller's actual knowledge. It also specifies the report does not constitute a warranty to the buyer and is not a substitute for a home inspection.

When the disclosure report is important is when the seller knowingly misrepresents something, but proving that can be difficult. Despite this limitation there are other grounds upon which a buyer may seek recovery from a seller, such as a claim of negligent misrepresentation.

So what should buyers do to protect themselves? Start by thoroughly reading the property disclosure report that the seller has provided. Inquire further if any of the seller's responses concern you. Then have a home inspection conducted by an independent, professional home inspector. Attend the inspection and take your time in understanding any potential defects that your inspector uncovers.

Buying a home is the largest single investment that most people make. While the law intends to protect buyers when their seller misrepresent things, the best offense is still a good defense. Protect yourself by becoming as informed as possible about the condition of the home you are purchasing, it may be the most valuable investment of time you make in the home buying process.

Related links:

View the Connecticut Residential Property Conditional Disclosure Report form.

http://www.ct.gov/dcp/lib/dcp/pdf/forms/real_estate_property_condition_disclosure_form_rev.pdf

Read a 2005 Connecticut Supreme Court case which addresses liability issues related to the Connecticut Residential Property Disclosure Report:

Dockter v. Slowik , 91 Conn. App. 448 (2005) http://www.jud.ct.gov/external/supapp/Cases/AROap/AP91/91AP491.pdf