July Flooding in Central Pennsylvania; Real Estate Property Disclosure

Recent rains have brought minor flooding to parts of Pennsylvania from Bedford to various points to the east.

Property damage is minor and lives have not been in danger. But this flooding still should be disclosed if you are selling a property that suffered from any flooding.

Sales are very slow now, but new homeowners are this week seeing their first heavy rains in the properties that they just purchased this Spring as the tax credit incentive expired. Some of those new homeowners are undoubtedly pulling their Sellers' Disclosure form out of their packets and reviewing the part that should have disclosed flooding. Some of them might even be calling their Realtors (or lawyers) to inquire about the possibility of pursuing their sellers for not disclosing that the property floods during heavy rain.

If you are selling property now, keep this scenario in the back of your head as you fill out the disclosure. The more you disclose, the less justification the buyer will have for suing you later on.

If you are a buyer, look closely at your prospective properties today (or at some point when the heavy rain is falling). Sales are slow and sellers are desperate. Sellers will lie and conceal in order to move a property and get out from under a mortgage that they can no longer afford.

Flood potential - March 2010; Pittsburgh; real estate implications; St. Patrick's Day Flood

No discussion of real estate would be complete without a warning about the potential for flooding at the end of a winter that has already brought near record snowfall. The Pittsburgh Post-Gazette warns of the potential for March flooding near Pittsburgh if predicted additional snowstorms arrive. Such an outcome, while far from certain, would have implications continuing far longer than the immediate damage and danger. Local economies, disclosures, misrepresentations, insurance coverage, income streams, appraisals and numerous other aspects would be forever altered by such a cataclysmic event.

If you are buying real estate in the next few weeks, pay particular attention to whether the property is in a flood plain. If you are uncertain about the possibility of flooding, buy flood insurance if you can. Most importantly, make sure the seller disclosure is as clearly and fully completed as possible. Sellers tend to be vague if there is something to hide (especially in the current fraud-prone market conditions). Pay particular attention to all explanations under section 16 (b) of the PAR disclosure form.

Buyers should ask their settlement attorneys now what options they will have if their newly purchased basements take on water during the March/April thaw. Sellers should know that the more they disclose now (before settlement), the fewer remedies the buyers will have in court later on.

According to the Post-Gazette, the worst flood to hit Pittsburgh in the last 100 years occurred in March 1936 ("The St. Patrick's Day flood"). Attached is newsreel footage from the same flood in Johnstown.




In Harrisburg, the most recent winter-related severe flooding happened in January 1996, when ice flows on the Susquehanna River destroyed the Walnut Street bridge.
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Update - 3-14-10 - Click here to find out how the flood situation turned out in Central Pennsylvania.

Seller's Property Disclosure Statement; Pennsylvania's real estate disclosure requirements; seller's refusal to provide disclosure; 68 Pa.C.S.A. 7303;

From April 2005 comes this blogpost about an attorney-seller that refused to provide the required disclosure form until after a buyer presented a written offer:

The following caveat appears in a listing for an Easton (PA) property: "Sellers Disclosure will be disclosed when offers are presented. None online. Investor has not lived in property."

The language quoted above conflicts with 68 Pa.C.S.A. 7303, which requires delivery of the disclosure form to the buyer "prior to the signing of an agreement." The Realtor in that case "had an appointment to show this property on Saturday and requested the disclosure. I was told that the seller would not release the disclosure until he had an offer in hand: "'He is an attorney and he knows the law.'"

The blog post concludes as follows - "We passed on that showing."

While the statute does not say "prior to presentation of an offer," any offer would become a binding agreement upon acceptance by the seller. Following the seller's instructions in the above case could very well create a binding agreement before the buyer ever saw the disclosure form.

The point I am trying to make by quoting this blog post is not merely to point out the disclosure law requiring provision of the disclosure form prior to execution of an agreement, but to point out the proper response by a buyer to a situation like the one presented above. The Realtor's response was correct. She passed on the showing.

Don't bother with sellers that appear to be cutting corners in the disclosure process. Sellers that act secretive are acting that way for a reason. Rather than confront the seller with the statute and try to force a disclosure out of him prior to making an offer, move on to another property.

In many of the cases that come to me regarding real estate fraud and nondisclosure of defects, the sellers had acted suspicously like the seller above. But in the cases that have ended up in court, the buyers had forced the issue rather than walk away prior to making an offer. Don't chase sellers whose behavior indicates that they have something to hide.

Seller's Property Disclosure Statement; Repairs and past conditions

If you are selling real estate, you should be certain to be thorough in completing the Seller's Property Disclosure Statement.

Many sellers believe that if they have fixed a problem, they are safe in answering "no" to certain questions. An example occurs in question 6 (a), where the seller is asked whether he is "aware of any past or present water leakage. . . ." Many sellers answer "no" because they replaced the roof in response to prior leaks and the problem no longer exists. It is a mistake to answer the question this way. This question (as well as others) asks about "past" conditions as well as "present" conditions. Just because you have fixed the problem does not mean you need not disclose the conditions about which the question is asked.

The buyer will eventually find out about past conditions and problems (usually after he moves in to the house and talks with the neighbors). If those problems reappear (or if new problems arise) the buyer will use any inaccuracy in the seller's completion of the form to justify a lawsuit against the seller. Any inaccuracy in the form will play very badly against the seller in court.

Seller's Property Disclosure Statement

A real estate seller is required under Pennsylvania law to disclose to any potential buyer known material defects in the property.

most real estate defects will not be this obvious












The Pennsylvania Association of Realtors (PAR) provides a disclosure form that goes beyond the requirements of Pennsylvania law for disclosure of defects. The basic disclosure requirements are found in the Real Estate Commission's form here at the Pennsylvania Department of State website.

If you are a buyer, you are better off using the PAR form, especially in light of the increased risk of fraud in today's real estate environment.