As a seller in Texas, you may have several questions and doubts in your journey on how to sell a house in Texas. There are many factors involved from the moment you engage with a buyer until the closing process. Questions such as how does for sale by owner work in Texas or whether opting for a real estate agent would be better? creates distress and confusion among sellers.
Once these issues are tackled then you find yourself in a sea of legal paperwork. Seller Disclosure Texas documents are one of the legal documents in your journey of selling. They are complex and may also seem daunting. Worry not, we are here to guide you through real estate disclosure laws in Texas.
What Is A Seller’s Disclosure?
Texas sellers disclosure form is a kind of a standard checklist form containing material defects and features of the property. It provides information about the property that may negatively affect the value of the house.
If there are material defects in a property that may impact the value of the property and the seller is aware of them, the seller should disclose them. However, sellers should report these defects to the best of their knowledge and in good faith. From pest infestation to pending legal issues, you should disclose any known information about your Texas house. This will help you avoid future disputes.
Importance Of Seller’s Disclosure
Sellers’ disclosures serve the following purpose in real estate transactions:
|🔎||Give Complete Information About The Property||Disclosures help communicate the defects present on the property. They ensure that all the stakeholders involved in the transaction are well aware of the property's history.|
|⚖️||Protects Sellers Against Legal Liabilities||Once you disclose all the known defects present in the house or which come to light during the inspection, you may be exempted from any future liability against those defects.|
|👍||Develops Credibility||Honesty, accuracy and transparency are of utmost importance when selling your house. Disclosures are a way of achieving all of these and thereby enhancing your credibility.|
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.
Texas Sellers Disclosure Exemptions
Texas Property Code lists 11 circumstances under which sellers are exempt from providing disclosures. These are as follows:
|1.||Selling a real estate having more than one dwelling unit|
|2.||When a property is sold by a trustee in the bankruptcy case|
|3.||Seller disclosure does not apply to a new house that is being built|
|4.||When an executor of a will is selling the house|
|5.||Real estate transaction taking place between two co-workers|
|6.||Selling process taking place to or from any governmental entity|
|7.||When a property is transacted to the spouse or a person in the lineal line of consanguinity|
|8.||Property being transacted between spouses in case of separation|
|9.||In a case where the value of any dwelling does not exceed 5% of the value of the property|
|10.||If a house is sold under a court order or is a foreclosure sale|
|11.||When a house is sold by a trustee in bankruptcy|
When Do You Have To Furnish Disclosures In Texas?
As per Section 5.008 of the Property Code, sellers are obliged to furnish the seller disclosure statement on or before the executory date of the contract. This makes sure that buyers know about the damages and defects present in the house.
If a contract is entered before providing the disclosure notice, then the buyer can terminate the contract within seven days after receiving the notice.
What Do Texans Have To Disclose When Selling Their House?
Sellers are expected to fill out the Seller’s Disclosure Notice which is provided by the Texas Association of Realtors (TAR). It is a 6-pages form that you need to fill out when selling your house in Texas. It contains 14 sections in which the following things have to be disclosed:
|Section Number||Things To Be Disclosed||Description|
|1.||Items Present on the Property||This section contains a checklist of various items such as centralized A/C, dishwasher, spa, smoke detector, etc. Sellers have to disclose if these things are present in their house. |
It also provides information about the water source. Sellers are also expected to disclose if their house was built before 1978. If yes, then you need to fill out the TXR-1906 concerning lead-based paint disclosure.
|2.||Structural Defects or Malfunctions||Here you have to disclose the defects or damages present in the structure of the house. It includes various structural features such as the floor, roof, exterior walls, etc.|
|3.||Condition of the House||In this section, sellers need to disclose if they are aware of any of the conditions related to the property given in the form. This includes various conditions such as radon gas, the presence of an oak tree, water damage, previous fire, etc.|
|4.||Item, equipment, or System That Needs Repair||Unlike other sections, it is a section that a seller needs to fill out manually and disclose any known defects (that need repair) on the property.|
|5.||Things Related to Flooding and Flood Plain||This section is a checklist wherein you need to disclose if your property is located on the flood plain, floodway, reservoir, etc. Sellers also need to disclose previous flooding information. |
If the answer to some of these questions is Yes, then sellers need to fill out and attach TXR 1414.
|6.||Previously Claimed Flood Insurance Benefits||Here, sellers 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. |
📝 Note: Federal Emergency Management Agency (FEMA) encourages owners of properties located in flood zones to have insurance that covers their property and items within.
|7.||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).|
|8.||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.|
|9.||Property Survey Conducted in the Last Four Years||In this section, sellers need to inform whether they have attached a previous survey of the property.|
|10.||Previous Inspection History||In this section, sellers need to provide information about previously conducted inspections. You need to provide information about the inspection(s) conducted in the past years only. |
📝 Note: The buyer should not rely on these inspection reports to determine the condition of the property. They should hire their own inspector to verify the same.
|11.||Tax Exemptions Claimed by the Seller||Sellers have to disclose any tax exemptions they are claiming on the property at the time of sale. This may include exemptions such as agricultural, senior citizens, disabled veterans, and more.|
|12.||Other Claims For Damage||The seller needs to check "Yes" if they have filed any claim for damage other than flood damage.|
|13.||Past Records of Unused Proceeds||In this section, sellers have 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.|
|14.||Presence of Smoke Detectors||Homesellers have to disclose the presence or absence of any smoke detectors in the house. Chapter 766 of the Health and Safety Code requires one or two-family houses to have smoke detectors installed. This has to be as per the local building code of the area.|
What Do Sellers Not Have To Disclose?
The following information that a seller isn’t required to disclose as part of Texas’ Seller Disclosure Requirements are:
- 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 that has AIDS or HIV
Moreover, the information stated above isn’t completely useless. The seller can either warn the interested buyer or keep the information to themself. Either way, no legal actions can be taken in the event the information remains withheld.
Which Other Disclosure Forms Do I Have To Fill In Texas?
Apart from the Seller’s Disclosure Notice, sellers are expected to fill out the following forms when selling their property in Texas:
|Federal Disclosure of Information on Lead-based Paint and/or Lead-based Paint Hazards||This is applicable if your house is built before 1978. It is a federal disclosure that all American home sellers are required to furnish. You need to fill out a form for disclosing hazards related to lead paint.|
|Fire Alarm Installation Certificate||Sec. 766.002 of Texas’ Health and Safety Code Title 9 Subtitle A Chapter 766 Subchapter A states that smoke detectors should be installed by local building codes. |
📝 Note: The information and format of the Fire Alarm Installation Certificate must be determined by the state fire marshal
» Also Read: Foreclosure in Texas – Read our blog to know how to stop foreclosures in Texas.
Texas Real Estate Disclosure Forms
Home sellers need to fill out the following forms as a part of Texas disclosures:
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Also Read: Companies that buy houses for cash in Texas – Find out the 9 Best Companies that Buy Houses for Cash in Texas.
Consequences of Lying On Texas Seller’s Disclosure
There are 3 actions a buyer can take if a seller lied on a property disclosure statement in Texas.
|Deceptive Trade Consumer Protection Act||The Act makes any false or misleading statement or deceptive act that was made to induce the buyer into buying unlawful. Further, any misrepresentations regarding the quality or standard of the property which induce the consumer into buying the house are unlawful.|
The buyer can claim monetary damages against the losses faced due to the material defect.
|Statutory Fraud Act||A case of fraud is brought against a seller when they misrepresent or fail to disclose any fact which could influence the buyer about entering into the contract. |
In such a situation, the seller pays exemplary damages, attorney’s fees, and other court costs if found guilty. An action can be taken under this Act where the defect is concerned with environmental hazards.
Under The Statutory Fraud Act, it is not so important to prove the seller’s prior knowledge about the defect. Hence, a suit under this Act is more dangerous for the sellers.
|Apart from these Acts, a buyer can sue under common law for fraud or misrepresentation. Because the buyer needs to prove the fraudulent intent of the seller under this suit, several buyers opt for the first two options.|
Lying on seller disclosure may lead to facing court proceedings and monetary or punitive damages followed by the rescission of the contract for sale.
» Also Read: Best Real Estate Websites in Texas – Find out the best real estate websites in Texas.
Most Common Mistakes By FSBO Home Sellers In Disclosures
The main object of disclosures in any area is to give clarity and perspective to a buyer. Buyers who are looking for a home usually have certain criteria in mind before searching a home. A seller disclosure acts as a bridge to close these doubts, giving buyers a reason to have faith in you and your deal.
- One of the biggest mistakes a seller can make is not giving disclosures at all. The lack of trust between a buyer and seller can demotivate a buyer from considering your property altogether. Hence, it is suggested that sellers complete all disclosure formalities as soon as possible, even though it may not be legally required in your state.
- Likewise, sellers also get an option to mark a point as ‘unknown’ in disclosures. This gives you ample opportunity to be honest in your disclosures. Also, marking a certain disclosure clause as ‘unknown’ shifts the burden on a buyer to inspect that particular problem. Hence, don’t make the mistake of lying on your disclosures, as that would count as fraudulent misrepresentation and attract a lawsuit.
- Most state laws prescribe that the disclosures should be provided before closing. As an FSBO seller, it is your duty to provide disclosures as soon as possible, since you do not have a real estate agent to do these things for you.
- ✍️ Pro Tip: Sellers who are selling their house the FSBO way are advised to keep their Disclosure Statement ready before listing on the MLS. It increases your credibility and reliability from a buyer’s perspective, as they get an idea of the property’s condition early on.
»Also Read: How To List On MLS For Sale By Owner Without A Realtor – Read Houzeo’s detailed information on how to list your house without a realtor.
Tips To Minimize Issues in Disclosure Documents
|Review And Verify||There’s a time allowance (some permit 10 days) to review and verify everything about your Purchase and Sales Agreement—also the square footage, home usage, and marketing.|
|Ask Questions||Ask questions when in doubt. This would help you in avoiding future troubles.|
|Hire A Professional Inspector||A professional inspector can help you gather backup information about the property’s condition. You can also opt for a pre-inspection before listing.|
» More: Texas Home Inspections – Read everything you need to know about home inspection in Texas.
|Disclose Everything||To avoid problems in your home disclosure statement disclose everything you know honestly. Even though it’s a minor issue, you must disclose it.|
|Get A Licensed Agent Involved||The best way to avoid disclosure issues is to get a licensed real estate agent. Agents can help you manage and assist you in the process along the way.|
» More: Best Realtor in Texas – Read more to know more about best realtors in Texas.
Also Read: Texas Home Inspector – Find out the best home inspectors in Texas.
- ✍️ Pro Tip: List Your Property With Houzeo
One of the best ways to minimize problems in your seller’s disclosure is to Purchase the “Contract to Close Upgrade Package”. A Licensed broker will review your paperwork to make sure it is appropriate. In addition, you should also have the settlement agent review the paperwork so you cover all bases.
» More: Start your FREE listing NOW!
Also Read: Average Cost of Home Inspection in Texas – Read to know the average cost of home inspection in Texas.
Final Word: Seller Disclosure Requirements In Texas Are Complex
|Level of Complexity||Average|
|Is Texas a Caveat Emptor State? *||No|
|Is Texas a Non-Disclosure State? **||Yes|
TX Seller Disclosure laws do not follow the rule of ‘caveat emptor,’ i.e. let the buyer beware. Thus, it is the seller’s duty to disclose all material defects that may affect the monetary value of the house to the prospective buyer.
Texas Seller’s Disclosures Statements are a little complicated. Selling your house FSBO is usually good, but then you would have to deal with all the disclosures on your own. This demands that you be aware of all the disclosure requirements and that any mistake can cost you dearly.
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.
Check out some of the Houzeo Offers and how it has helped customers around the US.
- ✍️ Editor’s Note: Though selling your home yourself on a For Sale By Owner website can save you thousands in commission, we highly recommend you add a Flat Fee MLS listing to your marketing strategy. Check out the best Texas MLS Listing
» More: Flat Fee Texas
*Seller disclosures are exclusively the responsibility of the home seller. Regardless of the service, you engage in, you are required to ensure seller disclosures provided by you are complete and accurate to your best knowledge. Houzeo is not a brokerage or a licensed agent. It is a tech platform and as such the tips presented here should not be construed as any advice for which a real estate or attorney license is required.
Frequently Asked Questions (FAQs)
Is seller's disclosure required in Texas?
Yes, sellers need to provide disclosures when selling their houses in Texas.
What is a seller's disclosure in Texas?
Sellers need to furnish Seller's Disclosure Notice when selling their house in Texas.
Does seller have to disclose previous inspection in Texas?
Sellers need to disclose information about the inspection(s) conducted in the past 4 years.
Is Texas a buyer beware state?
No, Texas is not a buyer beware state.
Do you have to disclose a death in a house in Texas?
You need not disclose a death in Texas when selling your home if it's not related to the property's condition.
What is the Texas disclosure statement?
Texas Property Code requires home sellers to fill out the Texas Seller's Disclosure Statement. Sellers disclose various facts, defects, and damages present in the house through this form.
Who is exempt from sellers disclosure in Texas?
Texas Property Code enlists 11 circumstances under which sellers are exempted from seller disclosures.
How to fill out a Texas sellers disclosure?
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.
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