Anyone who has bought or sold a home in Georgia is familiar with the Seller Property Disclosure Statement. This multi-page checklist is designed to help sellers disclose to buyers known property defects, as required under Georgia law. The comprehensiveness of the form gives the impression that Georgia imposes a high disclosure standard on Sellers. The disclosure standard is, in fact, actually quite limited.
Georgia adopts a modified caveat emptor (or “buyer beware”) disclosure standard. This means that a homebuyer is responsible for ascertaining the condition of the property. The law, however, requires a seller to disclose any known latent property defects. A defect is an adverse condition that a reasonable homebuyer would consider in a purchase decision. A defect is latent if a buyer could not be expected to discover it in a reasonably diligent investigation of the property (e.g., a professional home inspection). For example, a crumbling foundation is a defect. If it is hidden behind a finished wall, it is a latent defect which must be disclosed by the seller IF he/she is aware of it.
The Seller Disclosure form prompts disclosures well-beyond what the law requires. Most would agree, however, that over-disclosure is better than under-disclosure. Not disclosing adverse conditions, latent or not, only invites problems. Deliberately misrepresenting (or concealing) an adverse condition of the property, of course, is fraud.
There is no legal requirement to complete a Seller Disclosure form as part of a real estate transaction. As a practical matter, however, Buyers expect to get one. An exception is where the seller has limited knowledge of the property. A foreclosure or estate-owned property, for example, is often sold “as is” and with no disclosures. Even with these types of properties, however, the legal requirement to disclose known latent defects remains.
Legal considerations aside, the Seller Disclosure should be considered a “sales document.” A thoughtfully completed, accurate and professionally presented Seller Disclosure gives prospective buyers confidence in the quality of the home and the care the owner has given it over the years.