Disclosure Obligations When Selling Your Home in New Jersey

Applied to real estate transactions, “let the buyer beware” means that the buyer is responsible for doing their due diligence to determine the status of a property. But if you are the seller of a residential property, there are certain things you should disclose to a potential buyer in order to avoid them backing out of the transaction or worse—taking you to court. In New Jersey, there are laws in place to protect buyers against sellers who fail to disclose important information about a property.


Here are some things you must disclose if you are selling your NJ home:


  1. You Must Promise the House is Fit to Live In


If you are selling a residential property in NJ, you are legally implying that the house is fit to live in. This is the case whether you are trying to sell it as habitable or not. Therefore, you cannot sell the house “as is” to escape the requirement.


  1. You Must Disclose Any Known Latent Material Defects


A latent material defect is one that is concealed but known to the seller. For example, if you know there is a leak in your attic but there is no obvious evidence of this leak, you must disclose this to the buyer. Hidden defects that may impact the future health or safety of the buyer are specifically important to disclose. As the seller, any false statements you say or write, or any omissions you make, can result in a lawsuit if they result in loss to the buyer or make the property uninhabitable. A lawsuit can be brought before closing or many years after depending on the specific statue of limitations laws specific to the lawsuit, such as for fraud or misrepresentation.


  1. Disclosures Pertinent to the Sale Contract


The sale contract itself will often tell you what kind of representations or promises you are making about the property. These are typically items about which there are not specific laws, but their presence in the sale contract makes you subject to their terms. One of these promises is that all systems and equipment are functional. The contract can also compel you to identify how you have used the property and ensure you are using the property legally under current local zoning laws. Similarly, you will need to state that any work done to improve the property was done after obtaining the necessary permits and approvals. The buyer will want to know the work was done up to code and that the property tax includes any property improvements.


  1. “Intangible” Problems


There are some issues with a property that buyers cannot discover through an inspection. A property can contain some intangible problems that are impacted by psychological or other factors that have nothing to do with the physical condition of the property. A property could be considered less desirable to live in due to a history of deaths in the house, an incident of violence on the property, or even a supposed haunting. While under NJ law a seller is not required to tell a buyer up front about these issues, if a buyer specifically asks about them, the seller has to answer honestly.


If defects you were unaware of surface on an inspection, don’t panic. The discovery of home defects will not automatically lead to the transaction falling through. Most contracts include provisions that will allow the sale to go through. This provision will allow the seller time to make necessary repairs or enable the buyer to accept the property with a price reduction.


You should always disclose any physical issues or other defects about a property when selling it. If you fail to follow the disclosure obligations laid out by New Jersey law, you could end up paying for it. The money you would lose to price reductions or repairs by being up front about the problems won’t come close to the cost you could incur by trying to lie about them. Ideally, the buyer and the seller will be up front with each other concerning all information important to the real estate transaction.


A standard real estate contract will include many promises and representations. Contracts of Sale are long, complex legal documents. Veitengruber Law is an experienced, local real estate attorney. We can review the contract with you and explain any uncertain terms and the importance of any listed disclosures.

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