Sellers Need to Know: Louisiana Property Disclosure Document

Dated: January 3 2021

Views: 993


In Louisiana, all Sellers of residential real property must furnish Buyers with a Property Disclosure Document. A Property Disclosure Document is required by law even if a Seller is selling without involvement of a real estate agent. The required Property Disclosure Document may be in the form promulgated by the Louisiana Real Estate Commission or in another form that contains substantially the same information. The most current version of the state promulgated Property Disclosure Document can be found on the Louisiana Real Estate Commission website.

A few things Sellers need to know when completing the Property Disclosure Document:
1. Sellers need to take their time to read and properly complete it. Every question needs to be answered to the best of Seller’s knowledge by all Sellers and all known defects need to be disclosed.
2. Sellers need to provide the completed disclosure to the Buyer before or at the time an offer is made. Sellers need to have all Buyers sign, date, and time the disclosure to be able to prove Buyer’s receipt.
3. If the Property Disclosure Document is delivered after the Buyer makes an offer, the Buyer can terminate the real estate contract or withdraw the offer for up to 72 hours after receipt of the Property Disclosure Document. This termination or withdrawal will be without penalty to the Buyer and any deposit or earnest money must be promptly returned to the Buyer (despite any agreement to the contrary and no matter how close to closing you are).
4. If the Property Disclosure Document is never provided to the Buyer and the act of sale is completed, the Buyer could have legal recourse against the Seller as to any known defect(s) Seller had knowledge of and did not disclose, even if it was an “as is” sale. If there is recourse by a Buyer and what that recourse would be will depend on the circumstances of the deal and legal advice of an attorney will need to be sought.
5. Louisiana law provides that certain types of sales/transfers of residential real property are exempt from the requirement of Seller to provide a Property Disclosure Document. Those exemptions are listed in detail on the first page of the state promulgated Property Disclosure Document. Contrary to popular belief, a Seller not ever living in the home or not living in the home for several years are not valid reasons for exemption.

The golden rule, we recommend when completing the Property Disclosure Document is When in doubt, disclose!”  Even if there was a known defect, that was repaired, it may not be legally required, but it is good practice to disclose it and how it was remedied.  When completing the disclosure as a Seller, ask yourself, what would you want to know about the history of defects and repairs of the home if you were the Buyer. If you complete the disclosure following this rule, you will provide the Buyer with important information about the home they are buying and will walk away from closing knowing that you disclosed all known defects about the home and did your best to leave no cause for a Buyer to have any legal recourse against you.

KEY DEFINITIONS:
Residential real property is real property consisting of one or not more than four residential dwelling units, which are buildings or structures each of which are occupied or intended for occupancy as single-family residences.
Known defect is a condition found within the property that was known by the Seller and that results in one or all of the following: (a) It has a substantial adverse effect on the value of the property. (b) It significantly impairs the health or safety of future occupants of the property. (c) If not repaired, removed, or replaced, significantly shortens the expected normal life of the property.

Check back soon for a review of what a Buyer needs to know about the Louisiana Property Disclosure Document.

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