“A Seller Must Understand the Forms He Signs | Anna Gerlants”

Anna Gerlants believes sellers should understand the purpose of a Seller Disclosure Statement, which is a document that protects the seller if handled correctly. In this statement, a seller must disclose everything he knows from living in the structure on the property to avoid potential lawsuits following a purchase. A Seller Disclosure Statement must also be available for completion at the time property is listed.

As stated above, the seller must complete the form and identify any condition he knows about the property. Of course, says Anna Gerlants, this applies to information that is known or should be known by the seller. An owner is obligated to know and disclose conditions about property he owns. This means a buyer who has not received the “signed disclosure statement” can terminate an otherwise binding purchase agreement.

According to Anna Gerlants, a common error by real estate agents who list investment property is telling a seller who has never lived in the property that he need not disclose. Wrong! He owns it, and therefore it is his business to know it. Non-disclosure leaves a seller in violation. Sellers are required to provide the statement to the potential buyer before an offer to purchase is signed. Otherwise, Anna Gerlants states, the timeline required by law has not been met.

It would be a good idea for real estate agents to read the laws that they deal with pertinent to this. The most significant words of the Seller Disclosure Act are as follows:

“Transfers by a non-occupant fiduciary in the course of the administration of a decedent’s estate, guardianship, conservatorship, or trust.”

While an owner owns the property in question, a fiduciary is an agent of the owner. Sometimes, word of mouth does not reflect the words on paper, and rumors spread whether founded in fact or not, says Anna Gerlants. Anna Gerlants notes how expensive this can be to the seller if after the sale, a buyer chooses to sue for the expense of repairing non-disclosed damage.

Presenting this form to a seller requires several considerations, Anna Gerlants believes. Earlier in this article, we disclosed why sellers must provide this information to potential buyers. Beyond previous comments, a serious problem might result if a seller does not read the following words:

“Unless otherwise advised, the Seller does not possess any expertise in construction, architecture, engineering or any other specific area related to the construction or condition of the improvements on the property or the land.”

Anna Gerlants states that failing to deal with this statement can cause a seller/architect or plumber to fail to disclose his area of expertise.

A similar statement follows: “Also, unless otherwise advised, the Seller has not conducted any inspection of generally inaccessible areas such as the foundation or roof.” Information available from an inspector who inspected at an owner’s request and expense gives a seller no right to withhold information from a potential buyer gained from that inspection.

“This statement is not a warranty of any kind by the Seller or by any Agent representing the Seller . . . and is not a substitute for any inspections or warranties the Buyer may wish to obtain.”

Anna Gerlants recognizes the purpose of a disclosure is not to make warranties, but to reveal what is known. Another purpose is to remind the seller that if he is truthful, he is protected by the form. “You can’t disclose what you do not know,” says Anna Gerlants.

Anna Gerlants warns that the seller makes representations based on his knowledge. Anna Gerlants reminds him that, if a representation is wrong, it is a misrepresentation and might be fraudulent. Anna Gerlants notifies a seller that, by signing, he gives the agent authority to provide the disclosure to any actual or prospective buyer. If the seller has no agent, he must provide it to the buyer himself. The seller takes full responsibility for his representations since an agent representing the property only knows what the seller has shared.

Anna Gerlants also addresses the common question of whether or not the form is part of the contract. Michigan law requires sellers to disclose material facts about the property. A material fact is a value fact that helps a buyer determine if he wants the property, and if so, at what price. This Seller Disclosure Statement states:

THIS INFORMATION IS A DISCLOSURE ONLY AND IS NOT INTENDED TO BE A PART OF ANY CONTRACT BETWEEN BUYER AND SELLER.

In addressing the protective character of the Seller Disclosure, Anna Gerlants points to the next section of the form that clarifies how the seller should answer the questions that make up the bulk of the form.

First, the seller must answer ALL questions. Why? Anna Gerlants explains that each is a material fact that reminds the seller of conditions he must disclose. Second, the seller must disclose known conditions affecting the property (inside and out, reminds Anna Gerlants). Third, additional explanations should be included if necessary (this could include reports from inspectors a seller has hired). Fourth, the seller must complete the form himself, not depending on someone who never lived on the property. Lastly, if the seller has no knowledge of the facts, he should mark “Unknown” in the relevant field. Furthermore, if the question does not apply to his property, he should mark it NA, either non-applicable or not available, i.e. says Anna Gerlants, “There is none.”

According to Anna Gerlants, the law explains that written disclosure provided to a buyer’s agent shall be considered provided to the buyer. Legally, a buyer’s agent’s receipt is “imputed” to the buyer since the buyer and his agent are “one”. Disclosure, a fiduciary duty, implies that an agent discloses immediately to the client. However, this is untrue of a customer, says Anna Gerlants, since non-representation requires no disclosure.

Anna Gerlants works in the Detroit Metropolitan area and is an agent for both buyers and sellers.