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Real Estate Agent Q&A Series: Contracts and Legal Disclosures
There are many times real estate agents have challenging questions related to a transaction their client is facing. At Velocity Title, we work hard to help our agents navigate even the most complex scenarios. Our “Real Estate Agent Q&A Series” is a way to help answer some of these challenging questions, and offer advice to help move your clients forward. Our next topic in the series addresses Legal Disclosures in contracts:
Under Maryland Law, what do I have to disclose about the property condition and what’s considered a “material fact” requiring disclosure when selling a home?
Answer to Realtor:
Maryland Real Property Article 10-702, et. seq., gives sellers an option of “disclosing or disclaiming” material facts about a property condition when selling a home. If a seller opts to disclose, they will answer a series of questions about the property condition. If they disclaim, they will not answer the questions but instead execute the disclaimer that they are making no representations about the property condition.
Where people sometimes get confused is that even if the seller disclaims, it does not mean they can conceal or fail to disclose “known material defects” in the property. The law requires sellers to disclose any known material defects in their property to buyers. Likewise, real estate agents listing a property for sale have a legal duty under COMAR (Code of Maryland Regulations) to “reasonably investigate to ascertain all material facts” about a property they list and disclose those facts to buyers. While there is no specific list of what a “material fact” is, courts have generally considered them as any matter that would be material to the buyer making an informed decision about the property. Additionally, there is no specific detail in the law that defines what “reasonably investigate” means and how much investigation is required.
For example, when a listing agent lists a property and they know that the seller built a new deck and added a bedroom and basement in the lower level, does the agent have a duty to investigate if permits were secured? The answer would be yes—and in fact there are new addenda to contracts in Maryland just for that issue. The simple answer to all of these questions is that sellers must disclose “known material defects” and listing agents must take reasonable measures to discover all the material facts about a property. Both sellers, and the real estate agents assisting them in the sale, have these legal duties of disclosure to buyers.
Keeping You and Your Clients Moving Forward
Velocity Title has the legal expertise to guide real estate professionals, buyers and sellers through the tough, and sometimes complex, legal issues relating to real estate transactions. After all, for most people this is the single biggest investment they make in a lifetime—so nothing should be left to chance. The Velocity Title team has combined experience of more than 190 years of real estate title work. Let our team guide you and your clients through even the most complex transactions. To learn more, click here or contact us today.
To check out the first topic in our Real Estate Agent Q&A Series where we discuss a complicated 10-acre parcel of land situation, clear here.