✏️ Editor’s Note: Realtor Associations, agents, and MLS’ have started implementing changes related to the NAR’s $418 million settlement. While home-sellers will likely save thousands in commission, compliance and litigation risks have significantly increased for sellers throughout the nation. Learn how NAR’s settlement affects home sellers.
95% of homebuyers discover issues with their properties after the closing process. 60% of sellers do not disclose defects in their homes to potential buyers. Hiding defects whether intentionally or not can lead to potential lawsuits in Texas.
A seller disclosure is a document that informs the buyer about defects in a house. So you must fill this document accurately and honestly. It helps with offering legal protection, enhancing credibility, and reducing complications during the home inspection process.
If you wish to sell your home in the Lone Star State, enlist the help of a Flat Fee MLS service like Houzeo. Your home will be on the MLS in 24–48 hours. Houzeo automatically assigns the right disclosure paperwork which makes the selling process hassle-free.
- ✍️ Is Seller’s Disclosure Required in Texas?
Yes, you must fill out the Seller’s Disclosure Notice provided by the Texas Association of Realtors (TAR). This standardized form discloses all material defects and the overall condition of your property to potential buyers.
What Is a Seller’s Disclosure?
A seller’s disclosure is a legal document that homeowners must give to potential buyers. It contains information about the property’s condition, history, and any known issues that could impact its value or safety.
Moreover, seller disclosure ensures transparency in real estate transactions. It also helps to minimize legal risks and attract serious buyers. Overall, it makes the selling process smoother.
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What Do Texans Have to Disclose When Selling Their House?
Here are the things you have to disclose to sell your home fast:
| Section Number | Things to Be Disclosed | Description |
|---|---|---|
| 1. | Items Present on the Property | It include items such as centralized A/C, dishwasher, spa, smoke detector, etc. |
| 2. | Condition of the House | You will need to disclose radon gas, the presence of an oak tree, water damage, previous fire, etc. You will also need to disclose various structural features such as the floor, roof, exterior walls, etc. |
| 3. | Item, equipment, or System That Needs Repair | You must manually fill out the form and disclose any known property defects that requires repair. |
| 4. | Things Related to Flooding and Flood Plain | You need to provide information about the property's location in relation to designated flood zones and potential flood risks. You need to fill out and attach TXR 1414, if you are in this zone. |
| 5. | Previously Claimed Flood Insurance Benefits | You have to provide information about any previously claimed insurance for flood damage. Homes located in high-risk flood zone areas with mortgages are required to have flood insurance. đź“ť Note: Federal Emergency Management Agency (FEMA) encourages owners of properties located in flood zones to have insurance that covers their property and items within. |
| 6. | Previously Received Assistance for Flood Damages | This is applicable for sellers who have previously received assistance from Federal Emergency Management Agency (FEMA) or the U.S. Small Business Development (SBA). |
| 7. | Additional Things | It contains a checklist of various things that a seller needs to check off. It includes questions about Home Owner's Association (HOA), pending or previous lawsuits, rainwater harvesting system, nearby propane gas system, etc. |
| 8. | Tax Exemptions Claimed by the Seller | You are required to disclose any tax exemptions you claim on the property at the time of sale. This may include exemptions such as agricultural, senior citizens, disabled veterans, and more. |
| 9. | Past Records of Unused Proceeds | You are required to disclose if they have received any proceeds for a claim for damage and if that amount has not been used to repair the damage. |
| 10. | Presence of Smoke Detectors | You have to disclose the presence or absence of any smoke detectors in the house.
Texas law (Chapter 766) requires homes to have working smoke detectors, making disclosure of their presence or absence during sale mandatory. |
| 11. | Murders and Property-Related Deaths | Deaths, due to violence or property-related issues, must be disclosed. Even if the incident occurred before the current owner possessed the property, it's imperative to reveal such events. Additionally, any fatalities resulting from property defects, such as unstable structures or faulty wiring, must be openly communicated to potential buyers. |
What Do Sellers Not Have to Disclose?
The following is the information you are not required to disclose as part of Texas’ Seller Disclosure Requirements:
- Suicide, death due to natural or accidental causes unrelated to the property’s condition
- A sex offender living nearby
- Haunted property
- Anyone who lived on the property who has AIDS or HIV
Texas Sellers Disclosure Exemptions
- Multi-Unit Properties: This exemption applies when selling a property that comprises a duplex or triplex.
- Personal Residences: If you’re selling a single-family home, townhouse, or condo that has been your primary residence for at least two of the past five years.
- Builder Warranties: New homes built by licensed builders are exempt from the standard disclosure requirements.
- Foreclosures and REO: Lenders handling foreclosures or real estate-owned properties have different disclosure requirements than regular sellers. They often rely on property inspections and reports instead of completing the TREC form.
- Transfers During Divorce: Property transfers between spouses, do not require disclosure.
- Gifts: The obligation to disclose does not apply when gifting a property. However, it is advisable to disclose known defects to maintain open communication.
- Relocation Companies: Companies relocating employees are exempt. But if they are also the seller of the property, they are exempt.
- Estate and Trust Sales: Properties sold by executors, administrators, or trusts are exempt from disclosure.
- Government Transfers: Transfers occurring due to government programs like eminent domain or urban renewal are exempted.
- Limited Value Dwelling: The value of any dwelling property that does not exceed 5% of the total value is exempted.
Texas Seller Disclosure Laws
You may face civil penalties, including fines if you fail to disclose known defects. Moreover, negligent misrepresentation or fraud claims may hold you liable. Some of that could be imposed on you include:
- Texas Property Code, §5.008: This section outlines the requirement for sellers of residential property to complete a Seller’s Disclosure Notice, disclosing known material defects.
- Common Law and Contract Law: Providing false information on the disclosure form could potentially lead to claims of misrepresentation or fraud under common law or contract law principles.
- Texas Deceptive Trade Practices-Consumer Protection Act (DTPA): If the misrepresentation or false information on the disclosure form constitutes a deceptive trade practice, it might be addressed under the DTPA.
Consequences of Lying on Texas Seller’s Disclosure
You will face severe consequences if you lie on the Texas Seller’s Disclosure Notice. Buyers receive accurate information about the property’s condition through this designed legal document.
If you state false or misleading information on the disclosure, you may face legal action by the buyer, who could seek damages for undisclosed defects.
Tips to Minimize Issues in Texas Seller’s Disclosure Form
Here are the tips to save you from any legal issues:
- Complete a Pre-Sale Inspection: Conduct a pre-sale home inspection before you sell your home. It will help you to identify and address issues. This also helps build trust with potential buyers.
- Review the Sales Contract Carefully: Check provisions about seller disclosure in your contract. However, failure to disclose can lead to legal issues. It can also cause the sale to collapse.
- Document Everything: Keep records of any repairs, renovations, or maintenance done on the property. Moreover, this paperwork is proof that you’ve dealt with known issues.
- Disclose Everything: To avoid problems in your home disclosure statement, you should disclose everything. Also, a minor issue could turn out to be important.
- Consult with Professionals: If you’re unsure about what needs to be disclosed, seek help from real estate attorneys. They are familiar with local laws and practices and can help you handle any issue.
Bottom Line
Seller disclosure in Texas is a vital part of real estate transactions. Also, it requires you to reveal known material defects in a property. Providing false information on disclosure may lead to legal repercussions.
Houzeo can help you with this. By listing your property with Houzeo, you get access to all forms in electronic format. And that too, for FREE! Houzeo has segregated all the disclosures state-wise so that you don’t have to hunt for Texas seller disclosures separately.
Frequently Asked Questions
What are Texas real estate seller disclosure laws?
Sellers’ disclosure laws in Texas are governed by Section 5.008 of the Property Code. It says that home sellers of single-unit residential properties must provide buyers with a Seller’s Disclosure Notice.
How to fill out a sellers disclosure in Texas?
Sellers need to fill out the Seller's Disclosure Notice when selling their house in Texas. It has 14 sections through which sellers need to disclose facts and defects about the property. You need to check off all the questions and also fill a few sections of the form manually to provide additional details.
Does the seller have to disclose the previous inspection in Texas?
No, the Texas Property Code 5.008 Seller's Notice of Property Condition does not require disclosure of previous home inspections. Consider attaching past reports for transparency to build trust.
