Selling a Vermont Home: What Are My Disclosure Obligations?

As a home seller in the beautiful New England state of Vermont, you naturally want to make your home seem as perfect as possible. After all, selling a home is partly about marketing: advertising your listing, giving it a fresh coat of paint, taking photos, holding open houses, and describing the place to real estate agents and potential buyers. However, Vermont law requires that certain issues affecting your property be disclosed, particularly if you use a real estate agent. While Vermont does not have a comprehensive disclosure law like most states do, there are a number of regulations for you, as a home seller, to keep in mind.

Real Estate Regulations in Vermont

Vermont has not law that specifically requires you to give a formal disclosure statement to a potential buyer of your house regarding its various physical defects.

Vermont does, however, have extensive legislation around the specific issue of lead. Lead was a common element of paint before the 1980s, and can lead to various health problems, particularly for children and pregnant women. TheVermont Lead Law requires that you disclose to potential buyers any known information about lead-based paint and lead-based hazards before selling your house. Purchase contracts must include an extensive disclosure form about lead-based paint. Moreover, buyers have up to ten days to check for lead hazards after signing the purchase contract.

Vermont has further regulations in place if you choose to use a licensed real estate agent to sell your property. Vt. Admin. Code 20-4-1800:4.5 requires that a real estate agent must “fully and promptly disclose to a prospective buyer all material facts within the [agent’s] knowledge concerning the property being sold.” Some examples of material facts include:

  1. a defect that could significantly diminish the value of the land, structures, or structural components such as the roof, wiring, plumbing, heating system, water system, or sewage disposal system
  2. a limitation in the deed that could substantially impair the marketability or use of the property and thereby diminish its value
  3. a recognized or generally accepted hazard to the health or safety of a buyer or occupant of the property, and
  4. facts the agent reasonably believes may directly impact the future use or value of the property.

The law further requires that if you, as the seller, tell the agent not to disclose a material defect of your property to a buyer, the agent must quit. If you try to tell the agent to lie for you, the agent also must quit, or face the loss of his or her license, if the buyer discovers the fraud and files a report.

The Vermont Real Estate Commission’s Office of Professional Regulation, a division of the Secretary of State, is charged with ensuring that agents maintain high standards of honesty in dealing with consumers. If a buyer gets burned by a real estate agent’s failure to disclose a material fact about the property, that agent runs the risk of being punished by the Commission, for example by having his or her license suspended or revoked. This is a steep price to pay, and most agents are unwilling to risk this sort of liability by lying to a prospective buyer.

In plain English, all of this means that any licensed Vermont real estate agent has a legal obligation not to lie to a buyer. If the agent knows that the HVAC is busted, for example, the agent cannot tell the buyer that it’s fine. The agent also cannot repeat any lies that you may have told the buyer.

Most likely, you are using a licensed Vermont real estate agent to sell your property. Nothing in the statute requires the agent to perform a complete floor-to-ceiling investigation of your home before approaching buyers, nor does it require the agent (or you) to hire a professional inspector to find potential physical defects. The agent needs to disclose to the buyer only what he or she actually knows or has observed about the property.

That said, the buyer will likely want to hire an inspector for this purpose. Neither you nor your real estate agent need to bear that cost.

The Value of Making Disclosures to Home Buyers in Vermont

As a Vermonter, you may think that you are lucky to live in a state that doesn’t force you to reveal damaging defects about your property. However, you may be surprised to learn that there are some long-term benefits and protections associated with making disclosures to prospective buyers, and that as a result, many Vermont sellers proactively make such disclosures.

Different Vermont real estate agents use slightly different disclosure forms for their clients. The Vermont Realtors’ Association offers one popular form online, although your own agent might have a preferred version. Most of the questions ask you to check “Yes,” “No,” or “Don’t Know” in response to a few dozen questions about your property. The form asks simple questions about the physical condition of the house, such as “Does the roof leak?” and whether the home contains asbestos. You are also asked questions about legal matters, such as whether there are any easements or liens on the property.

Although the standard versions of the Vermont form are relatively short (about six pages), the answers to the questions should give potential buyers a fairly comprehensive snapshot of any known defects with your property. The form also gives you additional space in which to explain any of your responses to those questions in greater detail, and encourages you to attach pages if necessary.

Why make an extensive written disclosure if Vermont law does not require you to do so? First, it sets clear expectations. The buyer will see from the start that you are being open about the condition of the house. The relationship between you will feel collaborative, rather than adversarial. This alone is incredibly important for such a large-scale transaction.

Second, the disclosure prevents the buyer from later claiming that you covered up a particular defect, and thus are liable for fraud or breach of contract. Imagine that the foundation is unstable and needs to be buttressed. If the buyer moves into the home and discovers the problem, he or she will face the significant cost of remediation. If you failed to disclose that issue, the buyer might feel duped and decide to sue. Had you disclosed the issue, however, the buyer could not that he or she didn’t know about the problem before purchasing the home. In other words, disclosure can serve to insulate you from liability.

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