Selling a Mississippi Home: What Are My Disclosure Obligations?

What home sellers in Mississippi should know about their state's law on disclosures to buyers about the home's condition.

Selling a home in Mississippi, or anywhere, is never easy. You must manage such tasks as interviewing real estate agents, cleaning and painting, reviewing offers, and so on. And your legislators in Jackson have added a step, by instituting the Property Condition Disclosure Act, which requires that sellers of residential property make certain disclosures to prospective purchasers about known physical defects on the property. If you’re preparing to sell your Mississippi home, what exactly must you disclose to prospective buyers, and how?

Real Estate Disclosure Law in Mississippi

In Mississippi, disclosures are governed by M.S. Code § 89-1-501 et seq. That statute provides that the seller of any residential property “shall deliver to the prospective [buyer] a written statement required [herein]… as soon as practicable before transfer of title.”

The purpose of the statute is to compel you, as the home seller, to provide relevant information about the property and articulate any facts of which you are aware that negatively affect its value. This could cover a wide variety of defects in your home, ranging from the condition of the roof to the condition of the fuel tank. The legislature’s broader goal, of course, is to prevent the buyer from encountering any nasty surprises after moving into the home.

The timing of the disclosure is important. M.S. Code § 89-1-503 says that if the seller makes any disclosure after the buyer makes a formal offer of purchase, the buyer shall have three days after receiving the disclosure in person or five days after it's delivered by mail to terminate the offer. So, for instance, if a buyer makes you a written offer for your house, and then you, for example, take your time delivering a formal disclosure statement, or happen to disclose at some point that the electrical systems don’t work, that buyer automatically has a chance to reevaluate the offer at that time. To avoid such uncertainty, you are better off making full, written disclosures sooner rather than later.

The Mississippi Real Estate Commission (MREC)--a state agency charged with oversight of the real estate industry--provides a disclosure 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 Mississippi Disclosure Cover?

MREC’s disclosure form is short, but covers the areas of your property that a buyer will be most interested in. It is divided into 13 sections, which ask specific questions about different areas of the home. The questions cover everything from legal issues (are there any easements on the property?) to structural issues (has there been any remodeling since you moved into the home?).

Within each section, you are asked to respond by checking “Yes,” “No,” or “Unknown.” You always have the option to explain one of your answers in the space provided, or can attach an additional page. Sometimes, an explanation can help to reassure sellers that a particular issue is not an enormous problem. At the very least, the explanatory page can give the buyer some history (for example, that you had a particular plumber come to your home three years ago to fix a water pump, and it is now working).

Do not be afraid to check “Unknown.” Mississippi does not expect that you know every detail about every inch of your home. M.S. Code § 89-1-507 provides that, if some information that is “required to be disclosed is unknown or not available” to you, and you have made some “reasonable effort to ascertain it,” you can simply include a reasonable approximation in your statement. This is another way of saying that you should, for instance, make an effort to see whether your lights turn on, but need not hire an electrical engineer to perform an elaborate inspection on your entire electrical system.

There are a number of facts that you are not required to disclose. According to M.S. Code § 89-1-527, the fact or suspicion that the party was the site of a death, homicide, or suicide does not count as a “material fact” requiring disclosure. The same is true if the property was occupied by someone with a disease, such as HIV or AIDS. As the statute says, “failure to disclose such nonmaterial facts or suspicions shall not give rise to a criminal, civil or administrative action against the owner of such real property, a licensed real estate broker or any affiliated licensee of the broker.” Because these facts do not actually have any real affect on the property, you are not forced to disclose them to buyers and stoke unnecessary fears. You cannot, however, lie if a buyer asks about them directly, but should instead decline to answer.

Why Should You Be Open and Honest in Making Disclosures?

Most likely, your property in the Magnolia State is your single biggest asset. Understandably, you want to sell it as quickly as possible. On first glance, disclosing defects may seem like a significant burden. Why would your elected representatives force you to highlight bad qualities of the property to buyers?

There are several reasons why you should be open and honest, doubts and annoyances aside. First, M.S. Code § 89-1-523 notes that if a seller “willfully or negligently violates or fails to perform any duty [in this Act]… he shall be liable in the amount of actual damages suffered by a transferee.” The legislature does not want you to play games with a buyer. Indeed, M.S. Code § 89-1-511 requires that every disclosure “shall be made in good faith.” The statute defines good faith as “honesty in fact in the conduct of the transaction.”

Here’s an example of why this is practically important to pay attention to: Imagine that you purposely do not mention that there is no hot water on the second floor of your home, afraid that this might dissuade the buyer. The buyer closes on the home, moves in, and very quickly discovers the problem. The buyer will be angry, not just because you clearly omitted this detail from the disclosure, but also because he must now pay for an expensive repair. A buyer who becomes this angry is likely to sue you for costs under the statute.

The good news is that making disclosures can solve these problems. First, it can increase trust with the buyer at a crucial point before the closing of the sale. Second, and even more importantly, 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 full notice of the defect beforehand.

In short, Mississippi’s statute tries to guide you in the right direction by incentivizing you to make full and frank disclosures to your buyer. Doing so is likely to save you headaches down the line.

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