Property and environmental disclosure obligations and liability

Disclose facts; investigate risks

Property disclosures help a buyer make an informed decision. A material fact is information that could affect a reasonable buyer's decision or the property's value or desirability. A latent defect is hidden from ordinary observation; a patent defect is apparent. Known recurring leaks, concealed structural damage, and environmental contamination can be material. Exact disclosure duties and remedies depend on applicable law and the transaction.

A seller should answer disclosure questions truthfully from actual knowledge. Unknown does not mean absent. A license holder should disclose known material facts as required, avoid unsupported assurances, and recommend qualified inspection when warning signs exceed the license holder's expertise. A seller's instruction to hide a known defect does not excuse concealment. An as-is agreement allocates condition and repair risks but is not permission to misrepresent facts.

Disclosure, inspection, and warranty have different jobs

Disclosure communicates known information. Inspection investigates condition. A warranty is a promise about condition or performance. A buyer's receipt of a disclosure is not proof that the property is free of defects. Texas's Seller's Disclosure Notice expressly describes the seller's knowledge as of signing and says it is neither a warranty nor a substitute for inspections. Texas Property Code section 5.008 allows the seller to identify genuinely unknown information as unknown.

Environmental information and federal lead duties

For covered target housing, generally housing built before 1978, federal lead disclosure rules apply to sales and leases. Before the buyer or tenant becomes obligated, the seller or lessor must provide the lead hazard pamphlet, disclose known lead paint or lead hazards, and provide available lead hazard evaluation reports. A covered purchaser receives a ten-day opportunity for a lead risk assessment or inspection unless the parties mutually agree to a different period. Do not transfer this purchase inspection period to tenants. The purchase contract also requires the Lead Warning Statement and purchaser acknowledgments. An agent involved in the sale or lease has a compliance role under 42 U.S.C. section 4852d.

Disclosure of lead information is not a certification that a building is lead-free. For other environmental concerns, such as suspected asbestos, radon, mold, or underground tanks, communicate known facts and recommend the appropriate specialist rather than diagnose the hazard yourself. Keep written records of disclosures, delivery, and referrals.

Liability follows the conduct and the rule

Fraudulent concealment involves intentional hiding of material information; negligent misrepresentation can arise from careless false information. A disclosure form does not erase separate misconduct. Under the federal lead statute, a knowing violation can produce joint and several liability for three times the purchaser's or tenant's damages, with potential court costs and attorney and expert witness fees for a prevailing claimant. Distinguish that statutory remedy from ordinary repair expenses or a promise to make repairs.