Texas Real Estate Disclosure

Should I Encourage Full Texas Real Estate Disclosure To My Clients?

Texas Real Estate Disclosure

photo by Amanda Azzi

One of the common issues a texas real estate agent will encounter is disclosure with their clients’ homes. In Texas real estate disclosure is not to be taken lightly.  It’s without a doubt a two-sided issue: should you risk losing a sale by encouraging your clients to disclose all defects or should you have clients not disclose to you problems and sell the property faster? By taking a closer look at the issue, you can determine the right thing to do.

Texas Real Estate Disclosure Laws

The Texas Real Estate Commission or TREC offers a TREC Form for for full disclosure of property condition.  This form is used in residential transactions.  This specific TREC form is required and Texas real estate disclosure laws require that this form be given to purchasers.  As per section 5.008(a)

5.008(a) A seller of residential real property comprising not more than one dwelling unit located in this state shall give to the purchaser of the property a written notice as prescribed by this section or a written notice substantially similar to the notice prescribed the his section which contains, at a minimum, all of the items in the notice prescribed this section.

In addtion to Texas real estate disclosure laws and consumer rights movement, many states have implemented disclosure laws stating that real estate agents and their clients must disclose any problems with a property to potential buyers before the sale goes through. It’s essential to know your state’s disclosure laws. Pennsylvania law states that agents must “deliver” a document disclosing all defects either in person, via certified mail or fax. In many states, failing to disclose property defects can result in liability in a court of law.  With Texas real estate disclosure laws the purchaser can terminate the agreement and additional fraud penalties may be applicable .

What Must Be Disclosed with Texas Real Estate Disclosure?

Generally, any issue that will cost money for the buyer or that will present a potential health hazard should be disclosed. Most states have forms that real estate agents and their clients can check off and they can provide details to clarify issues. Some of those issues that must be disclosed include any issues with plumbing, leaking water, any type of insect infestation, roof problems or defects, heating or air conditioning system issues, drainage problems on the property, foundation instabilities or cracks, any title issues on the property, neighbor issues and lead paint. In many states, if the home has been part of a violent crime, that must also be disclosed.   Always err on the side of over disclosing.  Its not worth risking it.

Failure to Disclose in Texas Real Estate

If you encourage your client not to disclose the issues with their property and they sell the property without doing so, they could end up facing some pretty stiff consequences. Should the buyer go to court and sue, your client could end up paying for repairs and damages resulting from the undisclosed defect, attorney’s fees, punitive damages, and more. In addition, your client could be forced to take back the house if the court finds the sale invalid.  Furthermore you could face sanctions against your license or be sued personally.  We highly recommend you disclose and encourage your clients to do so.

Maintaining an Honorable Reputation

Perhaps most importantly of all, it’s the ethical thing to do to disclose defects with the property. No real estate agent would want their mother, sister, brother or another family member to purchase a home only to end up discovering that it’s full of defects and problems. So, why would you try to sell a home riddled with defects to another person? To maintain an honorable reputation and do the right thing, you should always encourage your clients to disclose defects with their property.

Talk to your clients about the responsibility of disclosing property defects and issues. Discuss the potential problems with selling the home (slower response from potential buyers) and discuss the consequences for not disclosing those problems. Maintain an honorable position and let your client know that it’s always the right thing to do to disclose problems and hazards.  Lastly with Texas real estate disclosure its important to take it seriously.  If you are in doubt, contact and attorney to discuss and get advice.  We are not qualified attorneys and you should always consult a professional when dealing with texas real estate disclosure issues and transactions.

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