Selling a Louisiana Home: What Are My Disclosure Obligations?

Selling a home in Louisiana? Here's what law and local custom says you should tell buyers about its condition.

Louisiana has endured some difficult times since Hurricane Katrina. But the housing market is rebounding, and you may be interested in selling your home. Before you can sell, though, Louisiana law requires that you make certain disclosures to potential buyers about the conditions of the home and property.

The purpose of these disclosures is to prevent nasty surprises for the buyer after closing. (Imagine how you would feel if you moved into a new home and realized that there was a termite infestation, or that none of the lights worked, and that the seller had hidden these truths!). This brief article will outline your disclosure requirements to potential buyers.

Real Estate Disclosure Law in Louisiana

Louisiana Revised Statutes § 9:3198  is the state statute that governs disclosures by sellers like yourself. The statute states that you “shall complete a property disclosure document in a  form prescribed by the Louisiana Real Estate Commission  or a form that contains at least the minimum language prescribed by the commission.”

The overall purpose of the statute is to compel a home seller such as yourself to detail any material 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.

Many of the categories of disclosure included on the form are what you might expect that a buyer would be interested in knowing before purchasing a home. You must answer “Yes,” “No,” or “No Knowledge.”

For example, Section 3 asks about the property's "Structure," including roof, pool, windows, ceilings and "Other." (Take careful note of the "Other" section; it's an indication to you that you shouldn't leave material defects off the form merely because it didn't specify a particular feature of your property.) 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.

Beyond these expected categories of disclosure, note that Louisiana Revised Statutes § 9:3198 further requires disclosure of some very specific information. (The standard form from the Louisiana Real Estate Commission covers these categories, too). You must state or disclose:

  • Whether or not the buyer is obligated to be a member of a homeowners’ association as a homeowner in the community in which the buyer is purchasing property.
  • Whether or not an illegal laboratory for the production or manufacturing of methamphetamine was in operation on the purchasing property.
  • Whether or not a cavity created within a salt stock by dissolution with water lies underneath the property and whether or not the purchasing property is within two thousand 640 feet of a solution mining injection well.
  • Whether the property has been zoned commercial or industrial.

In addition, you may make comments to supplement your answers. The comments are a good way to explain any issues, particularly if “yes” or “no” doesn’t tell the whole story. For example, one question asks whether the air conditioning is supplied to all rooms. If you say “no,” this could alarm a buyer. But if you add a comment indicating that all rooms except the basement are air conditioned, this minimizes the impact.

Study each of these disclosures carefully before answering, and check with your real estate agent or attorney if you are uncertain how to answer.

Timing of the Disclosure Statement

According to the statute, you must deliver the completed and signed property disclosure document to the purchaser “no later than the time the purchaser makes an offer to purchase, exchange, or option the property or exercises the option to purchase the property pursuant to a lease with an option to purchase.” Practically speaking, this means that you must give your disclosure statement to the buyer before the purchase contract is signed.

If you do not, then the buyer may terminate your contract or withdraw the offer within the 72 hours (excluding federal and state holidays and weekends) after you finally give him or her the disclosure form. Clearly, the Louisiana legislature wants to force you to give the disclosure statement early and ensure that the buyer has a few days in which to study it before making the final decision to purchase.

Do I Need to Have My Home Inspected Before Selling It?

No. The disclosure laws in Louisiana do not require you to hire an engineer or home inspector before selling your home. The buyer is encouraged to make that investment, however. On your end, you merely need to complete the disclosure form in good faith, to the extent that you know the answers to the questions.

You may be wondering: What does it mean to have "knowledge" of a defect? You probably do not have actual knowledge of every defect in your home. Actual knowledge means that you  know  that your water pipe is defective, and you sell the house anyway. This is different from merely speculating that, because your pipes are old, an inspector might (if you hired one) tell you that your pipes are broken. On the disclaimer, Louisiana requires only that you disclose what you know.

Why Should You Be Honest In Making Disclosures?

At first, all of this may seem to be a huge burden. Why would your elected representatives in Baton Rouge make it harder for you to sell your home by leading buyers straight to the problems with it, latent or otherwise?

While it is true that your disclosure may result in a lower purchase price, the legislature is actually doing you a favor: If you disclose a known defect, the purchaser cannot turn around months after the transaction has closed and sue you for fraud or misrepresentation. Indeed, the disclosure form will insulate 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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