Legal Hotline: What Do I Have to Disclose to Buyers About Conditions Outside the Property
July 10, 2019 Legal Updates MAR Legal Hotline
What, if anything, do I have to disclose to prospective buyers about conditions that are outside the four corners of the property?
There is no bright-line rule that limits an agent’s disclosure obligations under Chapter 93A to the geographic boundaries of the property. We received guidance on this issue from the Supreme Judicial Court in the case of Urman v. South Boston Savings Bank. Chapter 93A does not impose a duty to disclose unless there is actual knowledge of the defect. The court, however, did not limit the duty to disclose to conditions within the property lines. Instead, the court found that in appropriate circumstances, off-site physical conditions known to an agent may require disclosure to prospective buyers if:
- 1. The condition is unknown and not readily observable by the buyer; and
- 2. The existence of the condition(s) is of sufficient materiality to affect the habitability, use, or enjoyment of the property; and
- 3. The condition makes the property substantially less desirable or valuable to the objectively reasonable buyer.
The duty to disclose off-site conditions is typically limited to conditions which are “rooted in the land,” such as groundwater contamination, rather than so-called “transient social conditions.” Transient social conditions may include things like the quality of schools and noisy neighbors.
Agents should discuss the duty to disclose with their sellers and explain the potential liability for failing to disclose certain facts. All disclosures should be made in writing so that there is documentation of when and to whom disclosure was made.
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