Selling a Massachusetts Home: What Are My Disclosure Obligations?

Despite being in a "caveat emptor" state, Massachusetts sellers have some disclosure obligations to buyers.

Massachusetts is a caveat emptor, or “buyer beware,” state, meaning there is not a whole lot you are legally required to disclose to the buyer when selling your property. The burden is on the buyer to ask the right questions and perform a home inspection in order to determine the property’s physical condition, features, and so forth.

Massachusetts law requires only that home sellers disclose the existence of lead paint (see the Massachusetts Lead Paint Statute) and the presence of a septic system (see Title 5 of the Massachusetts Environmental Code).

While these are the only two legally required disclosures, you can expect prospective home buyers to ask you questions about the property, particularly after they’ve conducted a home inspection. A buyer might also request that you make additional disclosures in the purchase and sale agreement, including disclosures related to underground storage tanks, asbestos, and other hazardous materials.

Massachusetts Home Sellers Must Disclose the Existence of Lead Paint

If your home was built before 1978, you (most likely through your real estate agent) must notify buyers whose offer you have accepted about the dangers of lead paint. You must do so by completing the Massachusetts “Property Transfer Notification Certification.” Note that, per Massachusetts practice regarding entering into a home-sale contract, you will need to supply this notification before you and the buyer enter into the formal, lengthy purchase and sale agreement that eventually replaces the offer contract with which you start the deal.

In this certification form, you are telling your home’s buyers about the dangers of lead paint in general, disclosing any information you have about its presence on your property (or that you have no information), and informing buyers of their opportunity to conduct their own lead paint risk assessment within ten days of having received the form.

The Property Transfer Notification Certification must be signed first by you, then by the buyer, and also by any real estate agents involved in the transaction. It must be completed and signed prior to signing a purchase and sale agreement. If you fail to initiate this, you could be assessed a penalty of up to $1,000, and ordered to pay other damages to the buyer.

Massachusetts Home Sellers Must Disclose the Presence of a Septic System

According to Title 5 of the Massachusetts State Environmental Code, sellers of homes that have a septic system must disclose this to buyers. The code additionally requires that the system have been inspected within the two years leading up to the sale (or six months after the sale if circumstances such as frozen ground prevent an earlier inspection). The law does not, however, specify who is responsible for the inspection — though by custom, the seller usually takes care of it, prior to putting the property on the market.

The septic system inspection must be performed by a “currently approved System inspector.” The results of the inspection must be shared with the buyer and the local board of health. So, while the law technically requires only that you disclose the presence of a septic system, these additional inspection requirements have the practical effect of requiring you to disclose the system’s condition, as well.

Because most sellers are advised by their real estate agents to have a Title 5 inspection prior to placing their home on the market, and because the vast majority of purchase and sale agreements contain a contingency for the septic system to pass a Title 5 inspection, septic systems rarely become a major issue during negotiations.

However, the condition and cost of repairs to bring failed systems up to code can become a major negotiation issue for sales of homes that fail Title 5, in situations where sellers are not willing to make the necessary repairs and buyers insist on having these repairs done. Not all home buyers will insist on this, however, and Massachusetts law doesn’t require home sellers to bring their septic systems into compliance with Title 5 before selling the property.

Additional Disclosures Massachusetts Sellers Are Often Asked to Make

If the prospective buyer (or buyer’s agent) asks you (or your agent) specific questions about the condition of the property, or if you volunteer certain information about the property, you are required to disclose the truth — or at least any facts that that a reasonable person would rely on in making a decision to purchase a home. (This standard comes from various Massachusetts court decisions in individual cases.) In other words, you can’t lie, obfuscate, or conceal important truths once a buyer takes an interest in a certain aspect of your property.

Unfortunately, exactly how much you need to disclose is a highly subjective determination and depends on the facts of each situation. For example, in a court case where a buyer purchased a home infested with termites and tried to sue, the court found that because the seller had not misrepresented or led the buyer on, and the buyer passed up the opportunity to fully inspect the home, the seller was not liable. (See Swinton v. Whitinsville Savings Bank, 311 Mass. 677.) In another case, a judge ruled that a seller could be held liable to a buyer having answered an inquiry from the buyer about the septic system by stating that it had been inspected yearly, yet failing to share the actual inspection results showing that a hydrogen peroxide treatment had been performed (an indicator of possible further problems). (See Ajalat v. Cohan, 1998 Mass. App. Div. 266.)

Realistically, the manner in which you are most likely to be asked to make additional disclosures is through language inserted into the purchase and sale agreement, or as an addendum. Home buyers in Massachusetts often ask sellers to warrant, or state to the best of their knowledge, that the property contains no underground storage tanks, nor any hazardous materials such as radon, chlordane, or formaldehyde insulation.

Including such additional disclosures is a matter for negotiation between you and the buyer. A qualified real estate attorney can assist with the negotiations.

Most Massachusetts buyers who have entered into serious negotiations to buy the home will reserve the right to have the property inspected by a licensed home inspector. After this inspection, buyers will often come up with additional questions about the property’s condition. These questions might range from whether or not the basement has ever flooded to the condition of the electrical system. If you fail to do answer truthfully or you mislead the buyer, you could later be sued and held liable for misrepresentation.

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