Selling a South Carolina Home: What Are My Disclosure Obligations?

Before you can form a real estate contract with a potential buyer for your South Carolina home, state law requires that you give that buyer a "disclosure statement." This is a document that tells the buyer about any known defects in your home and property.

Defects come in all shapes and sizes. They might include an unpaid lien on your property from a contractor, a broken water pump in the basement, or a mold problem. What defects have in common is that they lower the value or attractiveness of the property. This is information a buyer would want. And the legislators in Columbia require you to give it to them.

Real Estate Disclosure Law in South Carolina

You can have a look at the state law that governs disclosures by sellers like yourself; it's at South Carolina Code § 27-50-10 et seq. The statute applies not just to direct sales of residential property, but also to leases of property with an option to purchase (for example, if you lease your property to your neighbor for three years, and include in the contract a clause that after three years, the tenant has the right of first refusal to buy it).

Interestingly, the statute does not apply to various other situations, such as between co-owners or divorcing spouses, or when "both parties agree in writing not to complete a disclosure statement." (See South Carolina Code § 27-50-30 In other words, if you and the buyer agree that no disclosure statement is required, and specifically state that in the purchase contract, South Carolina law will not force you to submit one.

What the South Carolina Disclosure Statement Contains

According to South Carolina Code § 27-50-40, you must give the purchaser a written disclosure statement, which you may deliver either electronically or some other way.

The statute requires that the disclosure statement include information on: (1) the water supply and sanitary sewage disposal system; (2) the roof, chimneys, floors, foundation, basement, and other structural components; (3) the plumbing, electrical, heating, cooling, and other mechanical systems; (4) past or present, unrepaired infestations of wood-destroying insects or organisms; (5) zoning laws, restrictive covenants, building codes, and other land-use restrictions affecting the property, encroachments from or to adjacent property, and notices from a governmental agency affecting the property; (6) presence of lead-based paint, asbestos, radon gas, methane gas, underground storage tank, hazardous material or toxic material, buried or covered, and other environmental contamination; (7) existence of a rental, rental management, vacation rental, or other lease contract in place on the property at the time of closing, and, if known, any outstanding charges owed by the tenant for gas, electric, water, sewerage, or garbage services provided to the property the tenant leases; (8) existence of a meter conservation charge that applies to electricity or natural gas service to the property; and (9) whether the property is subject to governance of a homeowners association.

The South Carolina Real Estate Commission has created a sample disclosure form that lays out all of this information. You must answer "Yes," "No," or "No Representation" to each question.

If you answer "Yes," you are encouraged to explain further, perhaps by attaching an additional page or report. If you answer "No Representation," remember that this could act as a red flag to buyers. Even one who makes an offer will likely take a close look at that particular aspect of the home, most likely by hiring an inspector, before the closing.

You must also be proactive when considering whether to enter any information in the various "other" clauses on the form, for example "other land use restrictions" and "other appliances." These are a clear indication that (per the statute) you are not meant to hide behind any failure of the form to ask the precise question that applies to your property, but are expected to tell prospective buyers about any and all material defects.

Your responsibility for accurate disclosures does not end once you hand over the form. According to South Carolina Code § 27-50-60, if you disclose any information that turns out to be inaccurate, or remember or find an additional defect requiring disclosure, you must promptly deliver a corrected disclosure statement to the buyer or make reasonable repairs before the closing.

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

Do I Need to Have My Home Inspected Before Filling Out the Disclosure?

There's no need to conduct inspections or consult experts before filling out the form. South Carolina Code § 27-50-40 is clear that "conditions of the property of which the owner has no actual or constructive knowledge" are not covered in the disclosure statement. If you do not know of any problem with the electrical generator, for example, you do not need to hire a mechanical engineer to come inspect it before you give the buyer the disclosure statement.

It is likely that the buyer will want a home inspection to be performed to verify whatever is contained in your disclosure statement and turn up unknown problems, but that cost and expense doesn't fall on your shoulders.

Why Be Open and Honest in Making Disclosures About Your South Carolina Home?

The first reason to be honest is that, given the likelihood that the buyer will conduct an inspection, you might be postponing the inevitable and undermining the buyer's trust in you if you attempt to hide a property defect.

What's more, South Carolina Code § 27-50-65 creates penalties for noncompliance, stating that homeowners who knowingly violate or provide false, incomplete, or misleading information on the disclosure statement can be held liable for the buyer's actual damages, court costs, and attorney fees.

The good news is that this is a two-sided coin: If you do disclose a known defect, the buyer cannot turn around months after the transaction has closed and sue you over the defects in your home. 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.

If selling your South Carolina home, the wisest strategy is to follow the letter and spirit of the law and provide a comprehensive disclosure.