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Disclosure Requirements For Sellers In Colorado
When a buyer and seller enter into a contract, a the seller has certain obligations to disclose any known defects, needed repairs, and violations of law which the home may manifest. Additionally, the contract provides the buyer with the opportunity to thoroughly inspect the property, and hire professional inspectors and engineers to inspect the property to determine it’s condition.
Colorado law follows a doctrine of “implied habitability” rather than “caveat emptor.” This means that home sellers are presumed to be selling a home that is habitable, structurally sound, and functional unless the seller otherwise informs the buyer. As a result, home sellers must disclose any significant problems they have experienced with their homes and what (if anything) they did to remedy the problems. Of course, buyers should ask the sellers about any specific questions they might have.
It bears noting that in Colorado, property
sellers and Brokers are not responsible to disclose any defects
about which they have no knowledge.
This seems reasonable, but in some states like California,
sellers and Brokers are responsible to disclose any defects about
which they should have had knowledge.
This is a big legal difference.
Nonetheless, sellers should take their
disclosure obligations quite seriously.
The majority of lawsuits from real estate transactions involve
disputes on disclosure. If
you are aware of a problem, disclose it immediately!
Following are the disclosure
and inspection requirements in a transaction:
Sellers Property
Disclosure Form: The Seller must complete this form, which is
a Colorado Real Estate Commission approved form that asks the seller
about appliances, electrical/plumbing/heating systems, roof, site
conditions, and known easements and encumbrances.
The Buyer receives a copy of this form and may rely on the
seller’s representations in determining whether the property condition
is satisfactory.
Click
here to download a copy of the Colorado Seller’s Disclosure
Form.
Inspection Rights:
Paragraph 10 of the Colorado Real Estate Commission approved Contract
to Buy and Sell Residential Real Estate form allows for the buyer
to inspect the property within a given time, known as the Objection
Deadline. A buyer’s inspection rights are virtually unlimited
under this provision. It
is usually recommended that the buyer hire a professional inspector
or engineer to perform an inspection on the property.
If the buyer finds any objectionable items, the buyer and
seller have until a given time (Resolution Deadline) to agree on
any repairs to be completed by closing.
If the buyer and seller cannot agree, the contract is null
and void and all earnest money is returned to the buyer.
Lead-Based Paint:
The seller of any property built prior to 1978 must complete a Lead-Based
Paint Disclosure that asks if the seller is aware of any lead-based
paint on the property or any reports that were ever issued about
lead based paint on the property.
The seller is also required to provide the buyer with an
EPA-approved lead hazard information pamphlet “Protect Your Family
From Lead in Your Home.” The
buyer has the right to conduct a risk assessment or inspection for
the presence of lead-based paint.
Click
here to download a copy of the Lead Based Paint Disclosure Form.
This file requires Acrobat Reader. To Download a free copy of this
program, click
Click
here to download a copy of the Lead-Based Paint Obligations
of Seller.
Radon is
a colorless and odorless gas which is released from the ground and
is known to cause health problems.
The Environmental Protection Agency has state that up to
4.0 picocuries/litre of air-borne radon gas is the maximum sale
level in a home. As part
of the inspection process, the buyer is allowed to test the home
for excessive levels of Radon.
Wells & Septic:
While most properties in Eagle County enjoy public water and sewer
services, many outlying properties are serviced by wells and septic
systems. The buyer, and oftentimes the buyer’s lender
obtain reports indicating the condition of the well and septic systems.
Title Examination:
The title policy issued by the title company details ownership of
the property and any limitations on the property’s “bundle of rights,”
such as easements, encumbrances, liens, deeds of trust, covenants,
and reservations. Examination of the title is usually routine
in platted subdivisions and condominium/townhome projects, but can
sometimes be a challenging part of buying and selling mountain property.
Sellers and Buyers
should be aware that these disclosures and inspections are a necessary
component of any successful real estate transaction. These issues constitute the “due diligence” which is necessary to
inform the buyer and protect their interests.
As issues and questions occur, buyers and sellers should
look to their Realtor for guidance and assistance.
Do You Want To Sell Your Home Fast For The Highest Possible Price?
Call Advantage Real Estate or Use Our Response Form!
970 / 926-1155
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