Buying a Louisiana Home: What Does the Seller's Disclosure Form Tell Me?

Louisiana’s home market struggled in the years following Hurricane Katrina, but sales are beginning to rebound. If you’re considering buying a home there, you will want to be sure that you know as much as possible about the property before signing on the dotted line. Louisiana law requires the seller to issue you a formal disclosure statement indicating any material defects about which he or she is aware. This disclosure statement is a critical first step--although not a last step--to ensure that you get the benefit of your bargain. What does Louisiana law require, and what sorts of disclosures can you expect from home sellers there?

Real Estate Disclosure Law in Louisiana

Louisiana Rev. Stat. § 9:3198  is the state statute that governs disclosures by sellers of residential real estate to buyers like yourself. It mandates that sellers complete a property disclosure document in a  form prescribed by the Louisiana Real Estate Commission  or containing at least the minimum language prescribed by the commission. The Louisiana Real Estate Commission (the “Commission”) is a state agency that regulates the real estate market, including brokers’ licenses and property transactions.

The overall purpose of the statute is to compel home sellers to detail any material facts of which they are aware that negatively affect the property. This could cover a wide variety of defects in the home, ranging from the condition of the roof to the condition of the gas tank.

As you will see, many of the categories included on the Commission’s  form  are exactly what you probably want to know before you purchase a home. The seller must answer “Yes,” “No,” or “No Knowledge” to each area of inquiry. For example, Section 3 asks about the property’s “Structure,” including roof, pool, windows, ceilings and “Other.” Section 4 asks about the condition of the plumbing system. Section 5 asks about the condition of the electrical system, including the type of air conditioning and heating units installed.

Louisiana Rev. Stat. § 9:3198  further requires the seller to disclose some very specific information, beyond these general sorts of categories, which are also included on the Commission’s form. The seller must disclose whether you are obligated to become a member of a homeowners’ association as a homeowner in the community in which the buyer is purchasing property. The seller must also tell you whether or not the property was ever used as an illegal laboratory for the production or manufacturing of methamphetamine (a dangerous drug).

According to Louisiana’s statute, the seller must deliver the completed and signed property disclosure document to you no later than the time you make a purchase offer. If the seller fails to get you that statement, you have the right to terminate any resulting contract or withdraw the offer within the 72 hours (excluding federal and state holidays and weekends) after you finally receive the disclosure form. The purpose is to give you a few days to study whatever disclosures the seller makes without feeling pressured into buying.

Practically speaking, you should not sign a purchase contract unless you already have the disclosure statement in hand. The information found there will help you decide how much money to offer for the property.

Should I Trust the Seller’s Disclosures?

Disclosure statements are  not  definitive accounts of every defect in a Louisiana home. If you carefully read the statute, you will see that the  seller  must complete the disclosure statement only “to the best of the seller's belief and knowledge as of the date the disclosure is completed and signed….” The seller is not required to hire an engineer or home inspector before selling your home. Thus, a seller who has no “belief” or “knowledge” that the home’s foundation is being eaten by termites will not and need not disclose any information about this to you. And although a seller who has lived in the home for a number of years should know its defects well, many sellers become blind to their homes' defects, or simply have no idea what's going on behind the walls, in the attic, and so on.

A savvy buyer should not take the disclosure form as gospel. You should hire your own  home inspector  to give you an independent analysis of the property’s condition. Indeed, the Commission’s disclosure form specifically advises you that “Nothing in this law precludes the rights or duties of a purchaser to inspect the physical condition of the property.” A full inspection is particularly important if the property you’re considering was affected by Hurricane Katrina or could be affected by future water intrusions--moisture is one of the most concerning sources of damage to a home. However, the seller’s disclosure statement is a useful starting point.

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