Selling a Delaware Home: What Are My Disclosure Obligations?

Guidance on what residential real estate sellers must tell prospective home buyers when selling a house in Delaware.

The road leading to selling your Delaware home is long. You generally interview real estate agents, spend time cleaning and painting, hold open houses, meet with potential buyers, and ultimately engage attorneys to help negotiate your sale. Delaware’s legislature makes the process just a little bit longer through the Buyer Property Protection Act, which requires that sellers of residential property make certain disclosures to prospective purchasers about known physical defects. If you’re preparing to sell your Delaware home, what exactly must you disclose, and how?

Real Estate Disclosure Law in Delaware

The Buyer Property Protection Act, codified as Chapter 25, Title 6 of the Delaware Code, requires the seller of residential real estate to complete a form—known as the Seller’s Disclosure of Real Property Condition Report—disclosing conditions and defects with the property. Specifically, the statute provides that “a seller transferring residential real property shall disclose, in writing, to the buyer, agent and subagent, as applicable, all material defects of that property that are known at the time the property is offered for sale.” The law also requires that you “provide the buyer with any information on radon from tests or inspections in [your] possession, and notify the buyer of any known radon hazards.”

The purpose of the statute is to compel you to detail any facts of which you are aware that negatively affect the property. This could cover a wide variety of defects in your home, ranging from the condition of the roof to the condition of the gas tank. The legislature’s broader goal, of course, is to prevent the buyer from having any nasty surprises after moving into the home.

The Delaware Real Estate Commission provides a seven-page form that contains all of the necessary information. You are required to provide written copies of this form to potential buyers.

What Issues or Defects Does the Delaware Disclosure Cover?

Delaware’s disclosure form is somewhat unique in its breadth and depth. While some states merely ask sellers to disclose any defects with respect to a few major elements of the property (often with an "other" clause), Delaware’s form is divided into 15 broad categories with nearly 200 total questions.

These broad categories capture many of the details about which a buyer would be curious. The questions range from major aspects of the home, to purely informational queries, to minor issues. For example, in the first category (“Occupancy”), you’re asked whether you currently occupy the property or whether you lease it.

In the seventh category (“Structural Items”), you’re asked whether there are any known problems with the home’s foundation and whether there has been any construction on that foundation. In the twelfth category (“Heating and Air Conditioning”), you’re asked how old the furnace is. Some of these questions might seem more important than others, but you must still answer all of them to the best of your knowledge.

You are then asked whether some 40 different home appliances—from the refrigerator to the smoke detectors—are “in good working order.”

In addition, you may make comments on page 6. Both the comment and the answer is part of a Delaware’s formal disclosure. The comments are a good way to explain any issues, particularly if “yes” or “no” doesn’t tell the whole story. For example, Question 71 asks whether there have ever been any termites on the property. If you merely check “Yes,” this would obviously alarm the buyer. But if your comment clarifies that there was a small issue many years ago, which you remediated and which has not recurred, the buyer would likely be put at ease.

Why Should You Be Honest In Making Disclosures?

You have a nice home in Wilmington and you want to sell it as quickly as possible. On first glance, this lengthy disclosure may seem like a significant burden. Why would your elected representatives in Dover force you to ‘lead with your chin’ and highlight bad qualities of the property to buyers?

There is no disputing the fact that your disclosures may scare away buyers, or result in a lower purchase price. Some buyers may not be interested in purchasing a home that will need to be repaired. But what should also be taken into account is that honesty and openness in the negotiations leading up to the sale will increase buyer confidence.

However, the disclosure form is not all bad news for you. A thorough disclosure can save you from significant headaches down the road. If you disclose a known defect, the purchaser cannot turn around months after the transaction has closed and sue you for fraud, misrepresentation or breach of contract. After all, the form gave him full notice of the defect before he or she bought the property.

For example, imagine that you know that there is mold in the basement bathroom, and so you answer “Yes” to Question #46 on the form. If the buyer purchases the house regardless, and then tries to sue you for the cost to remediate the mold, he will be unsuccessful. As Delaware’s disclosure law says, “The buyer shall not have a cause of action against the seller, agent and/or subagent for…  Material defects in condition of the residential real property disclosed to the buyer prior to the buyer making an offer to purchase.” The disclosure form insulates you from this sort of liability, which could otherwise cause legal fees and headaches long after you wish that you could move on.

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