Selling a New Hampshire Home: What Are My Disclosure Obligations?

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

Imagine that you are looking to sell your New Hampshire home.  Most states  have legislation that would require a home seller like you to give a written disclosure report to potential buyers. Such reports typically identify any “material defects,” which is just another way of saying “serious problems” with the property. These range from a defective refrigerator to a leak in the attic. In the Granite State, by contrast, no law requires you to disclose these sorts of defects to the prospective buyer of your home. Indeed, the disclosure law is limited to a few specific aspects of your home.

If, however, you use the services of a real estate agent, your agent may need to make certain disclosures to the buyer based upon professional regulations and state law. And even if you don’t, there are some good reasons for you to give the buyer a full disclosure report notwithstanding the lack of explicit legislation requiring you to do so.

Real Estate Regulations in New Hampshire

The disclosures required by New Hampshire law by sellers are very limited.  N.H. Rev. Stat. Ann. § 477:4-d  requires that prior to any offer of sale by the buyer, you must disclose, in writing, the following:

  1. Information about the type of private water supply system, including its location, malfunctions, date of installation, date of most recent water test, and whether or not you have experienced a problem, such as an unsatisfactory water test or a water test with notations.
  2. Information about the private sewage disposal system, including its location, malfunctions, the date it was most recently serviced, and the name of the contractor who services the system.
  3. Information about your home's insulation, including its type and location.

If no information about the private water system, sewage system, or insulation is available, these facts must be disclosed in writing. Remember, most homes will not have “private” water or sewer systems; they’ll use the public ones. Thus, this disclosure requirement may not apply to your home sale at all.

N.H. Rev. Stat. Ann. § 477:4-a  further requires that you give the buyer certain notices about radon gas, lead paint, and arsenic. These notices are essentially just form language that you must give to the buyer. They are available online, and your real estate agent or attorney likely has a sample form to use, which the buyer will need to sign.

Not only does New Hampshire lack any broader laws that requires home sellers to give a formal disclosure statement about physical defects to a potential home buyer, but New Hampshire courts enforce  caveat emptorclauses in purchase contracts. Under the doctrine of caveat emptor (“let the buyer beware”), judges ordinarily refuse to compensate buyers for home defects found after the purchase. There is a reason that New Hampshire’s motto is “Live Free or Die”; its legislators are not keen on excessive regulation!

Despite the lack of broader legislation on disclosure and the caveat emptor doctrine, New Hampshire does have some relevant regulations around disclosures of property defects.  N.H. Rev. Stat. Ann. § 331-A:25-b  provides: “The duties of [an agent] acting on behalf of a seller… include… Treating all prospective buyers… honestly [and]…. Disclosing to a prospective buyer or tenant any material physical, regulatory, mechanical, or on-site environmental condition affecting the subject property of which the licensee has actual knowledge.” Moreover, the statute mandates that this disclosure “shall occur at any time prior to the time the buyer… makes a written offer to purchase or lease the subject property.”

What does this mean in practical terms? Imagine that you are trying to sell your townhouse in Concord, and you tell your real estate agent that the foundation is caving in, and that you’d like to sell the house quickly before you need to bear the costs of remediation. Or similarly, imagine that the agent was walking around your home in preparation to sell it, when she notices that one of the bathrooms appears to have sagging floors.

Surely, unsteady foundations or possible bathroom leaks qualify as “material” defects within the meaning of the statute. The agent would have a legal obligation to report such facts to the buyer. An agent who fails to disclose such a fact to the buyer could lose his or her license. Thus, a real estate agent faces a great deal of risk if he or she knows about a defect, but fails to disclose it in order to expedite the sale.

Importantly, though, the statute also says that nothing in the law creates an "affirmative obligation on the part of the [agent] to investigate material defects.” This means that the real estate agent does not need to perform any sort of inspection or receive any formal reports before attempting to sell your home. Essentially, the agent is required to disclose to the buyer only what was manifestly obvious or what you, as the seller, actually mentioned about the property.

Purpose of Making Disclosures to Home Buyers in New Hampshire

Clearly, New Hampshire’s requirements for disclosure are fairly minimal. However, you may be surprised to learn that there are some long-term benefits and protections associated with making disclosures—and that many New Hampshire sellers choose to affirmatively make such disclosures as a result.

What would further disclosure look like? The New Hampshire Association of Realtors provides a commonly used  disclosure form, which covers many of the critical elements of the home. This form asks you to check “Yes,” “No,” or "Unknown" in response to a few dozen questions about your property. For example, you are asked how old the home is, whether it is the subject of any liens or lawsuits, and whether you are aware of any major problems with various aspects of the house (heating, cooling, electrical, plumbing, and so forth). It also asks for some basic information about the house, for example whether the property is subject to any special taxes or assessments.

Although the form is short, the answers should give potential buyers a fairly comprehensive snapshot of any known defects with your property—at least enough information to know what they should pay particular attention to when commissioning inspections of their own. The form also gives you additional space to explain any of your responses to those questions in greater detail, and encourages you to attach pages if necessary.

While this form is not required, you should consider filling it out anyway. Making disclosures will set clear expectations for the buyer, who will not be surprised by any defects that his or her own home inspector finds. Your willingness to disclose problems with the home up-front will engender trust.

Also, your disclosures will prevent the buyer from suing you after closing, when he or she (inevitably) discovers hidden defects. Imagine that the buyer moves into the home and suddenly realizes that the HVAC system won’t even turn on. The significant costs of repair might prompt the buyer to retain an attorney to sue you for fraud or breach of contract.

Of course, you may have strong arguments to beat such a buyer’s lawsuits, especially if your purchase contract included a caveat emptor clause. Still, nothing prevents the buyer from suing you. The buyer may lose the legal arguments, but you will be forced to hire an attorney and engage in the stress of litigation. Making a full and forthright disclosure of defects—beyond the short ones that New Hampshire already requires—would ensure that the buyer’s expectations match reality. All of this will help to make sure that your home sale in the Granite State goes as smoothly as possible.

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