28% of buyers in the US discover hidden issues long after closing the deal. One-third of them blame sellers for not being upfront about it. The last thing you want is for your buyer to sue you for undisclosed issues. A Texas seller’s disclosure helps you prevent that.
But finding the right disclosure can be tricky, and just one missed issue could cost you a fortune! Houzeo, Texas’s best home-selling website, removes this risk by automatically assigning the right forms for your sale. You can complete them online in just a few steps.
KEY TAKEAWAYS
- When to Disclose: Share your Texas seller disclosure form with buyers early on, ideally before offers come in. This builds trust and helps avoid deal delays.
- What to Disclose: List down defects like roof leaks, mold, electrical issues, or legal disputes that impact home value.
- Hidden Problems Count Too: Even if a defect isn’t easy to see, like foundation cracks or water damage, you still have to report it.
- Disclosures Can Save You Thousands: Around 77% of real estate lawsuits are linked to disclosure issues. Being upfront helps you avoid costly legal battles.
What Is a Seller’s Property Disclosure in Texas?
In the Lone Star State, a seller’s disclosure notice is a legal form that details your property’s past and present state. You’re required to inform buyers about issues like prior flooding or foundation trouble. This realty disclosure is crucial for ensuring transparency and protecting both parties involved in the transaction.
You must disclose any property damage from Texas natural disasters, such as hurricanes, floods, or tornadoes. Additionally, wildfires, hailstorms, and foundation issues caused by drought also require disclosure. Ultimately, failing to report past damage can lead to serious legal consequences.
What Do You Have to Disclose When Selling a House in Texas?
Texas law requires you to share everything about your property’s condition when selling a house in TX. However, if you sell your house for cash, you can skip this step. Here’s what your duty to disclose requires before closing the deal:
1. Material Defects
- Foundations & System: Disclose foundation, roof, plumbing, electrical, and HVAC issues you know about in your Texas property. Especially mention any past hail or wind damage to the roof and the AC’s condition.
- Water & Drainage: Tell buyers if your Texas house has ever had water inside from big rains or storms. Also, let them know if your land always has problems with water draining away.
2. Code Violations
- HOA & Deeds: For Texas properties within an HOA, you are required to disclose all associated fees and regulations. Additionally, you must inform potential buyers of any deed restrictions impacting the property’s usage.
- Ordinances & Liens: You must inform buyers of any city or county zoning or building code violations. Additionally, disclose any unrecorded liens or easements that affect the Texas property.
3. Environmental Hazards
- Potential Health Hazards: Disclose the presence of materials like asbestos (in older TX homes), lead paint (pre-1978 builds), or radon. Also, mention any history of mold growth, a common issue in the Texas humid climate.
- Pest Infestations: Be upfront about any past or present pest infestations. Also, disclose any damage and treatments your home has received.
4. Federal Disclosure Requirements
If your house was built before 1978, federal law requires disclosure of all known Texas lead-based paint hazards to potential buyers. Even for newer homes, the Lead-Based Paint Hazard Reduction Act of 1992 requires sellers to:
- Provide an EPA-approved pamphlet on lead hazards.
- Include the Lead Warning Statement in the contract.
- Disclose any known lead-based paint on the property.
What Do Sellers Not Have to Disclose?
You can omit the following information from the seller’s disclosure form in Texas:
- Death on the Property: If a death occurred over three years before the offer, you’re not required to disclose it (unless directly asked).
- Paranormal Activity: Ghosts, hauntings, or “stigmatized” properties don’t need to be revealed.
- HIV/AIDS Status: The health conditions of past or current occupants are legally private.
- Neighborhood Crime Stats: While major hazards must be shared, general crime history doesn’t require disclosure.
- Prior Owner’s Issues: Divorces, bankruptcies, or other non-property-related events can stay off the form.
Who Is Exempt From Sellers Disclosure in Texas?
Seller’s disclosure exemption in Texas applies to court-ordered sales and bankruptcy, relieving disclosure duties. Certain Texas familial property transfers also exempt sellers from standard disclosure rules.
- Multi-Unit Residential Properties: Texas law does not require sellers of residential properties with more than one dwelling unit to provide seller’s disclosures. Examples of these properties include duplexes, triplexes, or apartment complexes.
- Court-Ordered Sales: The court orders a sale, so sellers do not have to provide disclosure documents. Moreover, this exemption specifically applies when a court-appointed receiver manages the property during the sale.
- Foreclosure and Bankruptcies: Trustees in bankruptcy, mortgagees, or beneficiaries acquire property through foreclosure and are exempt from disclosure. Furthermore, those who obtain property via a deed instead of foreclosure also qualify for this exemption.
- Sales Between Family Members: Transfers between family members do not require a seller’s disclosure. For example, sales to or from a spouse or close relatives are exempt.
- Limited Value Dwellings: If the dwelling’s value does not exceed 5% of the total property value, disclosure is not required. In such cases, sellers are exempt from providing a seller’s disclosure notice.
Texas Real Estate Disclosure Laws
Failure to disclose real estate known defects can lead to civil fines. Negligent misrepresentation or fraud claims may also result in liability.
- Texas Real Estate License Act (TRELA): TRELA mandates strict real estate disclosure requirements for agents and brokers regarding material facts. Under the State of Texas real estate laws, licensees must provide full disclosure and maintain ethical integrity in all transactions.
- Homeowners Association (HOA) Disclosure: If the property is part of a Homeowners Association (HOA), then the seller must disclose details. Moreover, this disclosure helps buyers fully understand the community’s rules, costs, and obligations before closing.
- Texas Deceptive Trade Practices-Consumer Protection Act (DTPA): The Texas Deceptive Trade Practices Act protects consumers against false or misleading acts in business, including realtor disclosure. Buyers can sue sellers for damages resulting from deceptive practices.
What Is the Penalty for an Incorrect Texas Home Disclosure?
If you lie or omit information on your Texas initial disclosure form, you could face severe penalties. These may include one or more of the following:
- Failure to Provide Notice: Buyers in Texas have seven days to terminate the contract after receiving the seller’s disclosure. This absence of a Texas initial disclosure generates notable uncertainty for the seller.
- “As-Is” Limitation: Even with “as-is” clauses, Texas sellers must still honestly disclose known property defects. These clauses mean buyers accept the current condition, not dishonest representation.
- Specific Statutory Violations: The DTPA, or Texas Deceptive Trade Practices Act, is a state law safeguarding consumers. It prevents businesses from using misleading or false practices in transactions.
- Impact on Agent Liability: If a seller lies on disclosures and the agent knows, the Texas Real Estate Commission (TREC) may penalize them. Additionally, the silent agent could owe the buyer legal damages.
- Contract Rescission: The number of homes for sale in Texas is rising, and they may choose to look for a more suitable house.
How Important Is the Seller’s Disclosure Statement in Texas?
A sellers disclosure in Texas must disclose property flaws—real estate non-disclosure risks killing deals. Buyers walk away from hidden issues in this competitive market. So you must be carefull when you’re filling out disclosure forms, especially if you’re listing your home FSBO as there is no agent involved.
Once your disclosures are ready, the next step is listing. With the best Flat Fee MLS listing service in Texas, you can get your home on the market fast, typically within 48 hours, while saving thousands by avoiding traditional agent commissions.
