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

Let's say 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," another way of saying "serious problems" with the property. In the Granite State, by contrast, 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 might need to make certain disclosures to the buyer based upon professional regulations and state law. In turn, that agent will in all likelihood ask you to comply with local custom and fill out a seller disclosure form. And even if you don't use an agent, there are some good reasons for you to give the buyer a full disclosure report.

Real Estate Regulations in New Hampshire

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

1. Information about the type of private water supply system, including its location, any 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, that must itself be disclosed in writing. Remember, many homes will not have "private" water or sewer systems; they'll use the public ones. Thus, this disclosure requirement might 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 are essentially just form language. Your real estate agent or attorney will have a sample form to use, perhaps as an attachment to the main disclosure form (discussed below). The buyer will need to sign or initial it, to indicate receipt.

Despite these limited requirements, New Hampshire's regulations for real estate agents regarding disclosures of property defects are likely to affectc you. N.H. Rev. Stat. Ann. § 331-A:25-b says that agents have a duty to not only act on behalf of the seller, but treat all prospective buyers honestly, and disclose to them "any material physical, regulatory, mechanical, or on-site environmental condition affecting the subject property of which the licensee [the agent] has actual knowledge."

In other words, if you are trying to sell your townhouse in Concord, and 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, the agent must disclose this. Similarly, an agent who was walking around your home in preparation to sell it and notices that one of the bathrooms appears to have sagging floors will need to make the buyer aware of this, too. An agent who fails to disclose such a fact to the buyer could lose his or her license.

In order not to bear too much of the disclosure burden, and to ease negotiations overall (as described below), the New Hampshire Association of Realtors has created a disclosure form, which covers many of the critical features and elements of the home and property. Samples can be found online from various real estate agencies, or your real estate agent will have one for your use.

Importantly, the statute also says that there's no "affirmative obligation" on the part of the agent to investigate material defects. The real estate agent does not need to commission or perform any sort of inspection or receive any professional 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

There are long-term benefits and protections associated with making property disclosures. However, it's a serious task that you'll want to set aside some time for.

The standard form asks you to check "Yes," "No," or "Unknown" in response to numerous 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 its various aspects (heating, cooling, electrical, roof, soil, plumbing, past meth lab use, and so forth). It also asks for legal information about the house, for example how it's zoned, whether it's in a condominium complex, and whether it is subject to any special taxes or assessments.

If the property is a condo or otherwise governed by a homeowners' association, your agent will add a "rider" to the main disclosure form, in which you'll need to answer questions about its insurance, monthly fees and assessments, any pending litigation, how many parking spots come with your unit, and so on.

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

The advantage of making these disclosures is that it sets clear expectations for buyers, who will not be surprised by any defects that their own home inspector finds. Your willingness to disclose problems up front will engender trust.

Also, your disclosures will prevent the buyer from suing you after closing, upon discovering any hidden defects. Imagine that the buyer moves in and realizes that the HVAC system won't turn on. A sense of betrayal, not to mention 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 might have strong arguments to beat such a buyer's lawsuit. Still, you will be forced to hire an attorney and engage in the stress of litigation. Making a full and forthright disclosure of defects 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.