I recently had a listing where the owner was called and the neighbor notified him that the shared wooden fence between their properties was infested with termites. My Seller called me and asked what we needed to do. I told him to first get the termites treated. Once an item is repaired, it is no longer defective, and disclosure of repaired items is not required except as noted in the sellers disclosure notice here in Texas (namely, previous fires, previous flooding, previous foundation repairs, previous structural repairs, and previous termite treatment and repairs). Additionally, I let him know the Sellers Disclosure Notice would need to be updated.
Sellers Disclosure Notice in Texas
The Sellers Disclosure Notice in Texas is a document in a residential real estate transaction that discloses, in writing, the material facts about the condition of the property being sold. Pursuant to Section 5.008 of the Texas Property Code, the Sellers Disclosure is required to be written, signed by the Seller, and delivered to the Buyer before closing of a residential real estate transaction here in Texas.
Section 5.008(d) requires the disclosure notice to be “completed to the best of the Seller’s belief and knowledge as of the date the notice is completed by the Seller.” If you find yourself in a such a scenario and you are not sure what to do, call our office to speak to a competent Texas real estate attorney to guide you through the process. We have offices located in Houston, San Antonio, and Edinburg Texas.
Many Sellers and even real estate brokers/agents seem to be under the impression that as long as sellers disclosure notice is true at the time the form is completed, the Seller has fulfilled their legal obligation. A recent (2014) court decision from the 11th Court of Appeals of Texas confirms that this is not the case, and that a Seller has an ongoing duty to disclose conditions that occur after the original disclosures were completed.
Gary Domel and Kim Domel v. Gaylon Birdwell Appeal
In that case, Domel v. Birdwell, the Eastland Court of Appeals considered damages by a hail storm and flooding that had occurred after the Seller’s completion of the required disclosures, but before the time that the Seller delivered such disclosures to the Buyer. The Seller failed to update the disclosures, and never disclosed the flooding, roof damage and insurance claims after the disclosures were completed. Once the buyer was presented with the disclosures, the Seller simply delivered the completed disclosures without updating them to include the flood and roof damages.
The Eleventh Court of Appeals found that a common-law obligation to update information arises from the fact that the earlier representation — even if true when made — becomes untrue and only “partial” based upon the new development. When a seller makes a representation, they have a duty to disclose new information when they are aware the new information makes the earlier representation misleading or untrue. Untrue and partial representations are actionable under Texas law. Our real estate attorneys located in Houston, San Antonio, and Edinburg Texas can help you get through the ins and outs of the Seller’s Disclosure Notice.
If you have a question about what a Seller should disclose, contact a competent real estate attorney to help guide you in the right direction. It is better to take preventive measures than attempting to fix an issue after the fact. If you need a Texas real estate attorney, contact our firm in Houston, San Antonio, and Edinburg Texas.
(Written by Steven Almaraz – Firm Manager)