In Arizona, sellers are required to disclose any “material” facts about a property. A material fact is considered to be information that could impact a buyer’s decision to buy a property or affect the amount they would offer for the property. The Arizona Association of Realtors has a Residential Seller Disclosure Advisory for sellers to complete. This document is completed by the seller for the benefit of the buyer. It is important for sellers to disclose what they know about the property. The standard state of Arizona form walks the seller through 5 sections which cover the property and additional space for the seller to add any other pertinent information.
This section, sellers state the names of the legal owners of the property. Sellers disclose whether the property is covered by a Home Owner’s Association and whether there are any assessments the seller is aware of. This section covers general information a seller should know, which a buyer would want to know to decide to purchase a property. Most information is straight forward and easy for sellers to answer.
2. Building and Safety Information
This section addresses structural issues with the property, This section also addresses termites, plumbing, electrical and pool aspects of the property. While buyers who have lived in a property for many years may not recall every visit by a plumber or electrician, they should recall anything that was a major issue. Sellers are expected to provide routine maintenance of their property, Here buyers are looking for anything unusual or identifying issues to be concerned with
A seller must disclose what utility services are available at the property, ie electricity, gas water, cable or other utility providers. This helps the buyer identify the service providers. Buyers may prefer one service provider over another, ie in Phoenix SRP (Salt River Project) versus APS (Arizona Public Service)
4. Environmental Information
Here sellers must disclose anything they know about the property regarding the environment. This includes landfills, settling soil (which we do have in the outlying Phoenix areas) and
addresses any known issues such as soil settling, landfills, etc.
5. Sewer/Waste Water Treatment
This is where sellers disclose whether the property is hooked to a sewer or perhaps has a septic system. Typically within the city limits properties, today are connected to a sewer system. It is not unusual for homes in rural areas to be on a septic system.
6. Can A Seller Refuse to Provide Disclosures
We often see seller declining to provide a Seller Property Disclosure Statement, citing the fact that they have never lived in the home. The state of Arizona in this document is not asking if someone lived in a property. They are asking what the seller knows about the property.
A seller who rented a house out for 5 years would be aware of repair items as they would have paid for those repairs. Again, not living in a property does not mean the owner isn’t aware of issues or repairs to the property. We also see this often with investor properties. The investor bought a property, went in and repaired or updated the property. Again, they may not have lived in the house, but there do know what has been updated. They also know if they encountered such issues as mold, electrical or plumbing issues.
Again, the question is not whether the owner lived in the property. The state of Arizona wants buyers to have the full benefit of what the seller knows about the property. This information could affect the amount of money a buyer is willing to pay for the property. This information could also affect whether the buyer wants to cancel the contract and not proceed with the sale.
7. Does a Buyer have Recourse if A Seller Lies?
Sellers who fail to disclose could find themselves with legal action from a buyer. If a buyer finds an issue that the seller should have disclosed, there are legal remedies open to them. It isn’t unusual for neighbors to be aware of house issues, and they could well share this information with a buyer.
8. Lead-Based Paint Disclosure
This is a federal law requiring sellers to disclosure to buyers that the home was built prior to 1978 and could contain lead-based paint. It is then up the buyer to do any lead-based testing they feel they want to do. The seller is only required to disclose there “may” be lead-based paint in the home.
What is an Important or Material Fact?
In Arizona, sellers are required to disclose important or material issues. These are those that have an impact on the value of the property, the buyer’s decision to purchase, or use of the property”. Since we don’t what know is “material” to a buyer, sellers are asked to disclose anything that could affect the buyer’s decision to move ahead with the sale. Typically, a scratch the wall or a crack in a tile is not “material” facts on the house condition. The facts a seller would want to disclose would likely include things a buyer can’t see, such as prior repairs or damage, ie fire damage, roof damage and repair from a storm, a prior slab leak, etc.
Some Things Not Requiring Disclosure
A sex offender living in the area – Many sellers may not know if there is an offender in the area. However, buyers can look up this information by going to the Arizona Department of Safety Sex Offender Database
Sellers are not required to disclose a death on the property, whether a natural death, murder or suicide. However, in many older homes years ago it was typical for the homeowner to die at home, therefore some homes on the east coast of midwest could have had multiple deaths due to natural causes.
A seller is not required to disclose whether a felony was committed on the property
A buyer will not typically see any disclosures on whether the house was owned by someone with AIDS, HIV or any other disease that could be transmitted by occupancy in a property.
In any case, if a seller is asked a question directly, they must answer or state they will not answer. They just can not lie to the buyer. If the seller truly does not know an answer of “I don’t know” is acceptable. Remember, the seller is to disclose what they know. They are not expected to know every bit of history about the house. But, the seller is expected to answer truthfully.
I am an FSBO (For Sale By Owner)
Arizona law doesn’t make a distinction between sellers selling their own property or those using a real estate agent. All sellers must disclose what they know about a property without a buyer having to ask. an FSBO is not exempt from disclosure