When an owner sells real estate property, they must disclose information about a property’s condition in a written document. In this article, we’re taking a closer look at disclosure requirements for Minnesota real estate.
Why Does a Seller Need to Provide Disclosure?
The Minnesota law requires that the seller provide a written disclosure to the potential home buyer before signing the agreement to sell. According to the General Disclosure Requirements, this document must contain all information the seller is aware of that might negatively affect the buyer’s use and enjoyment of the property and its intended use.
It is in the seller’s interest to disclose any issues, even if they aren’t covered by the law, since it can help prevent any legal action from an unsatisfied buyer after the agreement has been signed. If you need to consult an expert regarding this matter, check out the list of realtors in Minnesota to get professional assistance.
What is the Condition of the Property Disclosure?
The Condition of the Property Disclosure Form is a nine-page document that the home seller must fill out, honestly answering the questions. Compared to other states, Minnesota’s disclosure form is more specific.
What is a seller obliged to state in the Condition of the Property Disclosure?
Here are the statutory disclosure requirements a seller as the only source of all the information is required to provide:
- Storage tanks. If there are any storage tanks (including underground ones), the seller must reveal this fact.
- Water wells. The seller must inform if there are any wells on the property and specify if they are in use, sealed, or currently not in use.
- Individual sewage treatment systems. As a home seller, you must provide information on how sewage at the property is managed and if it leads to a sanitary sewer or private system.
- Radon gas. According to the Minnesota Radon Awareness Act, Before signing an agreement to sell a real estate property, the seller must disclose any knowledge the seller has of radon concentrations in the dwelling to the buyer in the written form.
- Methamphetamine production. The seller is also obliged to reveal any cases of the manufacture of methamphetamine on the property.
- Common Interest Community Resale Transaction. According to Minnesota law, If the property under the Minnesota Common Interest Community Act is resold, the seller must provide the buyer with a Resale Disclosure Certificate.
- Contract for Deed Sales. Under Minnesota law, a seller with Multiple Contracts for Deeds must disclose the possible risks to the potential homeowner.
- Material defects. A home seller is obliged to reveal any material defects the property has. This includes roof leak or damage, foundation issues, HVAC system issues, plumbing leaks, defective drywall, the presence of wood-destroying organisms or mold, diseased trees, wet floors or wet walls, cracked floors or walls, etc.
- Pets. A seller must state if there have been any pets in the house.
- Condition of the mechanical systems. The disclosure form contains a section where a home seller has to specify if mechanical systems, fixtures, and appliances are in working order, including but not limited to: air conditioners, central heating systems, electrical systems, doorbells, fireplace, hot tub, plumbing systems, swimming pool, window glass, and seals, etc.
What happens if the seller fails to disclose critical information?
A seller or real estate salesperson can become liable for failing to provide required disclosures. The time to file a lawsuit or go to arbitration may be limited under Minnesota law or by the agreement between the buyer and seller. For that reason, any homebuyer who considers themselves a victim of a failure to disclose should consult an attorney as soon as possible.
What is the Residential Lead-Based Paint Hazard Reduction Act?
Issued back in 1992, the Residential Lead-Based Paint Hazard Reduction Act requires the disclosure of any lead-based paint (including chipped paint) in a house. However, this applies only to buildings constructed before 1978.
The act aims to protect residents against lead exposure from paint and lead poisoning. The seller must inform the buyer whether the building has any reports or records of lead-based paint hazards and provide a 10-day period for the buyer to undertake a risk assessment or paint inspection.
When aren’t disclosures required?
There are some exceptions to when disclosure must be provided, described in Minnesota Statute 513.54. This document specifies that disclosure requirements do not apply to the sale of non-residential property. Also, if the property is being transferred to heirs, to the seller’s relatives, or due to a foreclosure or a decree of divorce, a disclosure isn’t needed. In addition, this law states that a disclosure does not have to be made when transferring a newly constructed residential property, meaning that the disclosure applies only to real estate that has been previously owned or occupied.
Home disclosure is an essential legal requirement that shouldn’t be overlooked. It helps to protect sellers from potential lawsuits if there’s an issue with the property. If you find it challenging, working with a professional is always a good idea. The top realtors in Minneapolis, MN are happy to guide you through the paperwork and assist you with questions.