What is the Seller’s Obligation to Disclose?

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As a Title Attorney, I’ve seen my share of off the wall stuff. Just yesterday I received this exact email from a fellow attorney at Title Stream:

“Does anyone know off the top of their head - Are sellers required by law to disclose to buyers that the prior owners were bludgeoned to death inside the home? I just finished an abstract on this property and googled the address and stumbled across this article…”

What followed was an article describing a gruesome murder that had occurred in a home that is currently under contract. Turns out in Louisiana, sellers are not required to disclose that this murder, or any death for that matter, occurred in their home. Sellers are not required to state if they believe their house is haunted. An issue, not surprisingly, comes up occasionally in New Orleans. So what DOES a seller have to disclose?

Seller Disclosure is governed by Revised Statute 9:3198 which requires the following:

  • The seller much complete a property disclosure document in a form prescribed by the LREC.
  • Must detail any material facts that you are aware of that negatively affect the property

This is a broad statement, and could cover a wide variety of defects in a home, ranging from the condition of the roof to the condition of the gas tank.  There is an “Other” section on the property disclosure form so the seller must disclose defects they know about, even if that defect is not specified on the form.

In addition, to normal defects the following defects must be disclosed if the seller has knowledge of any of the following:

  • Whether the buyer is obligated to be a member of a homeowners’ association as a homeowner in the community in which the buyer is purchasing property.
  • Whether an illegal laboratory for the production or manufacturing of methamphetamine was in operation on the purchasing property.
  • Whether a cavity created within a salt stock by dissolution with water lies underneath the property and whether the purchasing property is within two thousand 640 feet of a solution mining injection well.
  • Whether the property has been zoned commercial or industrial.

Honesty is always the best policy, and that is especially true here. Concealing defects is fraud and carries some pretty harsh penalties. As an agent, it is always best to instruct your sellers to be as honest as possible. If you have any questions, reach out to us. We're happy to assist you however we can.