Understanding
Maryland's Property Disclosure Law
Maryland's
Property Condition Disclosure/Disclaimer law changed on October 1,
2005 (The form was updated again 10/1/07). This change in the law
clarified sellers' responsibilities for disclosing problems with a
property that they are selling. The requirements are the same, whether
the seller uses an agent or sells "For Sale By Owner." Most sellers
are required to fill out either a disclosure or a disclaimer when
they put the house on the market, both of which can be found on the
same form. The decision on which part of the form to fill out is up
to the seller. And while the agent should be able to thoroughly explain
the entire form, they cannot give legal advice to a seller on which
one a seller should do.
If
the seller fills out the disclosure, they must list all material defects
the property has, and that the seller has actual knowledge of. If
the seller fills out the Disclaimer, the seller is stating that they
are selling the property "as is," with all defects which may exist
(unless they agree to repairs in the contract), and the seller is
making no warranties as to the condition of the property. Under the
new law, even if the seller fills out the Disclaimer, they must disclose
in writing any latent defects on the property that the seller has
actual knowledge of. A latent defect under Maryland law is basically
a hidden defect, which directly affects the health or safety of the
buyer.
The
form must be provided to any buyer before they make an offer on a
property. If the form is not given in time, the buyer may be able
to get out of the contract on that basis, and may place financial
liabilities on the seller. It is also extremely important that an
agent and/or seller use the correct version of the form (dated 10/1/07).
If an earlier version of the form is used, it is the same as if the
form was not completed at all.
There
is a list of exceptions to the law (cases where a seller would not
be required to use the form), for example, in most cases, it is not
necessary on a new home. Agents and sellers should keep in mind, however,
that the exceptions are only for the Disclosure/Disclaimer form. It
does not exempt sellers from other disclosures, such as the lead disclosure
form.
