Your Parents Didn’t Lie! Honesty Really is the Best Policy - the Seller's Property Disclosure Form

Buying or selling a home may be the largest transaction of a Colorado Resident’s life. It is important Buyers and Sellers of residential real estate in Colorado understand the property disclosure rules when entering into a purchase agreement.

What are the Colorado Property Disclosure Rules?

Colorado real estate sellers must disclose “known adverse material facts.” To facilitate this disclosure, Colorado’s form Contract to Buy and Sell Real Estate (Residential) created by the Colorado Real Estate Commission (“CREC”) requires sellers of real property to fill out and deliver the most current version of the CREC Seller’s Property Disclosure form (the “Disclosure Form”) to Buyers before the disclosure deadline. The seller must complete the Disclose Form to the seller’s actual knowledge and ensure that the Disclosure Form is current.

A Seller must also disclose to a buyer any adverse material fact discovered after the Disclosure Form has been submitted. A buyer has the right to terminate based on a seller’s new disclosure on the earlier of closing or five (5) days after Buyer’s receipt of new disclosures.

Filing out the Disclosure Form assists in full disclosure, which is its purpose, but regardless of whether the Disclose Form asks for information or not, a seller must disclose all known adverse material facts.

The idea behind the seller disclosure obligation is to ensure that a residential buyer knows what they are purchasing. A seller of residential real estate cannot be deceitful when attempting to sell a property. For example, if a seller knows about a sewage repair that needs to be made on the house, this must be disclosed. It is unfair for a buyer to have to purchase a house without knowing about the mess that needs to be cleaned up. Honesty is the best policy for sellers and buyers when purchasing real estate in Colorado.

What should be included in the Disclosure Form? 

There are sixteen (16) categories on the Disclosure Form. The seller must acknowledge any adverse material facts affecting the property whether a specific item is on the list or not. The non-exhaustive category list includes the following:

·      Structural Conditions;

·      Roof;

·      Appliances;

·      Electrical & Telecommunications;

·      Mechanical;

·      Ventilation/Air/Heat;

·      Water;

·      Source of Water & Water Supply;

·      Sewer;

·      Flooding & Drainage;

·      Carpet & Floors;

·      Use/Zoning/Legal Issues;

·      Access & Parking;

·      Environmental Conditions;

·      Common Interest Community; and

·      Other General Disclosures.

Conclusion:

A dream home can quickly turn into a nightmare when property disclosures are not correctly made. Whether you are buying or selling a home in Colorado let the experts at GLO help ensure the disclosure requirements are being met so you can breathe easy during your important transaction. Fill out an interest form today to see if GLO can help you.

GLO has prepared this blog to provide general information on legal issues that may be of interest. This blog does not provide legal advice for any specific situation, and this does not create an attorney-client relationship between any reader and GLO or its attorneys. GLO engages clients only through specific fee arrangements and signed engagement letters. GLO does not guarantee any results.