Selling a Maine Home: What Are My Disclosure Obligations?

If you are planning to sell your Maine property, you no doubt want to show the home in the best possible light. However, Maine, like many states, also mandates that real estate sellers reveal various problems that could affect the property's value or desirability. You can't legally conceal a significant defect, such as a broken roof or a weak foundation, and hope the homebuyer doesn't notice until the sale closes. But this law actually offers some benefits to you, as discussed below.

If you're selling your Maine home, what must you disclose, and when?

Disclosure Law in Maine for Real Estate Sales

Maine Rev. Stat. Title 33, § 173 (1999) requires sellers of residential real estate (with a few narrow exceptions) to give purchasers a "property disclosure statement," covering issues including:

• the water supply system
• the insulation
• the heating system
• the waste disposal system
• whether any hazardous materials (like asbestos, radon, arsenic, or lead-based paint) are present in the property, and
• any other known defects (a catchall category).

Note that you cannot simply add an "as is" clause to the purchase contract in order to escape your disclosure responsibilities under this statute.

Your real estate agent can give you an actual form, most likely prepared by the Maine Association of Realtors. It asks for details on all the issues covered in the statute, and more, so as to give the buyer a comprehensive understanding of what living in the house will entail.

Expect, for example, to provide information on when your sump pump, if any, was last serviced, and whether the property is subject to any easements, encroachments, rights of way, leases, or homeowners' association covenants or restrictions (CC&Rs).

When Must the Maine Real Estate Seller Disclosure Be Made?

According to Maine Rev. Stat. Title 33, § 174 (1999), you'll need to have the property disclosure statement delivered to the prospective buyer before or immediately upon that person making a purchase offer. If you wait until after the offer comes in, the buyer will have 72 hours after receiving it in which to freely terminate any real estate contract you'd signed.

In other words, as the seller, it's in your best interests to make sure the statement is in the buyer's hands before getting deep into deal-making and signing a purchase contract. Otherwise, you risk the buyer developing last-minute cold feet after seeing your disclosure form, by which time other prospective buyers might have moved on.

What Issues Are Left Off the Maine Real Estate Disclosure Form?

Importantly, Maine doesn't require you to hire an inspector or verify the information disclosed in your form. Rather, you are required to disclose only defects that you knew about when making the disclosure. But remember that the catchall clause sweeps in even types of defects that aren't specifically listed on the form.

Federal Lead Disclosure Requirements

Beyond Maine's legal requirements, real property sellers must also comply with disclosure rules under federal law. The main ones relate to lead-based paint. If selling a home that was built prior to 1978, you must disclose any known lead-based paint hazards there. (The federal lead disclosure requirements are found at 42 U.S.C.A. § § 4851-56.).

You must also give an EPA-approved informational pamphlet to prospective buyers, along with any existing reports relating to lead in the home. Additionally, you must give buyers an option to conduct a lead-based paint inspection or assessment, and include specific warning language relating to lead-based paint hazards in the purchase and sale agreement.

Why Should You Be Honest and Open in Making Disclosures to Maine Home Buyers?

It might be frustrating for you as a home seller that Maine law requires you to fill out this form and highlight weaknesses in your property. You might think: Isn't it in my best interests to make any defects sound minimal, or to hide them entirely?

In the short term, this strategy could result in a quicker home sale. But in the longer term, you could expose yourself to buyer anger if the same issues turn up in a professional inspection report done before the closing; or to later legal liability if the buyer finds problems with the home after moving in, then realizes you were not entirely honest. A seller who fails to fully and honestly complete the Maine disclosure faces legal consequences. The buyers might seek reimbursement from you for the costs of repair.

Not only honesty, but in some cases disclosing more than you need to is the best policy. Buyers will appreciate your thoroughness in advising them of minor problems up-front. It enhances their confidence, and can smooth the transaction. By contrast, litigation after the closing would be costly and time-consuming, regardless of the outcome.

For More Information

If you're having doubts about whether and how to disclose something about your Maine home, consult an experienced real estate agent or an attorney.