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

Home Buyers: What to Look for in Your State's Seller Disclosure Form

If you are buying a home in the beautiful New England state of Vermont, you want to make sure that the home is in good condition. If it turns out to harbor more defects than were obvious on your first visit, you might want to back out of the sale, or at least offer the seller proportionally less money, knowing that you may need to repair the home. How will you know if there are problems with the property?

Vermont law requires that the seller affirmatively disclose certain issues affecting the property. If the seller uses a real estate agent, Vermont law requires even further disclosures. While Vermont does not have a comprehensive disclosure law like  many states  do, there are a number of regulations on disclosure about which you should familiarize yourself.

This article will discuss what information you are legally entitled to before you purchase the property, and the importance of also hiring a professional home inspector to give you an independent evaluation of various aspects of the property.

Real Estate Regulations in Vermont

Vermont does not have one broad piece of legislation that requires sellers to give you a formal disclosure statement regarding all physical defects in the house.

The state does, however, have legislation around the specific issue of lead. Lead was a common element of paint before the 1980s, and can lead to various health problems, particularly for children and pregnant women. TheVermont Lead Law  requires that sellers disclose to potential buyers any known information about lead-based paint and lead-based hazards before selling the house. Purchase contracts must include an extensive  disclosure formabout lead-based paint. The law even gives you ten days to inspect the home for lead-related hazards after signing the purchase contract.

If the seller uses a licensed real estate agent, then Vermont has further disclosure obligations.

Vt. Admin. Code 20-4-1800:4.5  requires that a real estate agent “fully and promptly disclose to a prospective buyer all material facts within the [agent’s] knowledge concerning the property being sold.” The legislation gives examples of material facts as including:

  1. a defect that could significantly diminish the value of the land, structures, or structural components such as the roof, wiring, plumbing, heating system, water system, or sewage disposal system
  2. a limitation in the deed that could substantially impair the marketability or use of the property and thereby diminish its value
  3. a recognized or generally accepted hazard to the health or safety of a buyer or occupant of the property, and
  4. facts the agent reasonably believes may directly impact the future use or value of the property.

The law also includes a somewhat harsh provision stating that if the seller tells the agent  not  to disclose a material defect to a buyer, the agent must quit. In other words, if the agent is told to lie to you, he or she is required to give up the listing or risk the loss of his or her license, if you (as the buyer) discover the misrepresentation and file a report.

The Vermont Real Estate Commission’s  Office of Professional Regulation, a division of the Secretary of State, is charged with ensuring that agents maintain honesty in dealing with consumers.

If a buyer gets burned by a real estate agent’s failure to disclose a material fact about the property, that agent runs the risk of being punished by the commission. While all real estate agents are, to some extent, motivated by the prospect of a sale, this would be a steep price to pay. In short, licensed real estate agents are not permitted to lie to you about the condition of the home. If the agent knows that the heater is busted, for example, the agent cannot tell you that it works.

Should You Trust a Seller or Real Estate Agent’s Disclosures?

As we have seen, the seller must give you disclosures related to the presence of lead in the property. The seller can also make additional voluntary disclosures of information on a separate disclosure form. For example, the Vermont Realtors’ Association offers  one popular form  online for free, which includes pages of questions that the seller will answer about various aspects of the home.

The question is: Should you trust the disclosures given to you by the seller or the seller’s real estate agent? Beyond the seller’s lead disclosure, only a real estate agent is obligated to make a disclosure, and only to disclose defects about which he or she actually  knows. Nothing in the statute requires the agent to perform a complete floor-to-ceiling investigation of the home before approaching buyers, nor does it require the agent (or seller) to hire a professional inspector to find potential physical defects. The agent needs to disclose to the buyer only what he or she actually knows or has observed about the property. That could be nothing at all!

This is precisely why it is important to hire a  professional inspector, who can give you an independent assessment of the home. Even if you assume that the seller and the real estate agent are being truthful (which you should not always assume!) they may not actually  know  about every defect in the property. An independent inspection report will be more likely to uncover the home’s flaws.

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