Many states have enacted laws that require the seller to disclose serious or material defects in the property he or she wants to sell. The buyer should not totally rely on this legally-required document to tell him or her the condition of the house. It is extremely important that a buyer have his or her own inspection done on the house by a licensed inspector.
The states that require a seller’s disclosure have enacted laws that make the seller liable for deliberately submitting a false disclosure report. However, the requirement here is only that the seller acknowledge any defect that he or she is aware of. The seller is not required to do any investigation beyond what a reasonable person would do. Even if the seller lists some item as having a major defect, there is no requirement that the defect be fixed, just that it is acknowledged.
The potential buyer should scrutinize the seller’s disclosure document, if one is required in that state. Pay attention to the length of time the seller has occupied the property, if ever. Under the law a seller could legally say that he or she had no knowledge of a material defect because the seller never lived on the property. Many homes are sold by people who never lived in the house, so these disclosure documents can be misleading.