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Real Estate Agent Generally Not Liable for Seller’s Disclosure Notice

REQUIREMENT OF SELLER’s DISCLOSURE NOTICE

Texas law requires Sellers of residential properties to disclose certain conditions that exist on the property. The form of the Seller’s Disclosure Notice is mandated by statue.

Section 5.008(a) of the Texas Property Code states:

Sec. 5.008. SELLER’S DISCLOSURE OF PROPERTY CONDITION. (a) A seller of residential real property comprising not more than one dwelling unit located in this state shall give to the purchaser of the property a written notice as prescribed by this section or a written notice substantially similar to the notice prescribed by this section which contains, at a minimum, all of the items in the notice prescribed by this section.

FORM OF SELLER’s DISCLOSURE NOTICE

Section 5.008(b) requires that the Seller’s Disclosure Notice be executed (by the Seller) and also provides the minimum language of the notice.

To facilitate a Seller’s furnishing the required notice, by the Texas Real Estate Commission and the Texas Association of Realtors have issued promulgated Seller’s Disclosure Notice forms. Texas Realtors has also issued a form whereby a Seller can update the Seller’s Disclosure Notice.

SELLERS, AND NOT THEIR AGENTS, HAVE A DUTY TO COMPLETE ACCURATE DISCLOSURE NOTICE

Many disgruntled buyers and their lawyers assert claims against real estate brokers or agents based upon disclosure deficiencies.  This blame is usually misplaced. Ensuring the accuracy and completeness of a Seller’s Disclosure Notice is the sole responsibility of the Seller — even when an agent assists.

The law imposes a duty on sellers of real property, not their agents, to complete the Seller’s Disclosure Notice. Van Duren v. Chife, 569 S.W.3d 176, 188 (Tex. App.-Houston [1st Dist.] 2018, no pet.). (citing Tex. Prop. Code Ann. § 5.008(a), (d)).

AGENTS WITH KNOWLEDGE OF FALSE OR INACCURATE INFORMATION IN DISCLOSURES  CAN BE LIABLE

There is an exception to the rule that agents are generally not liable for a Seller’s non-disclosure.  The exception applies when the agent has reason to believe the seller’s disclosures are false or inaccurate. Id. at 321; Van Duren, 569 S.W.3d at 188.  Consequently, a broker would have a duty to come forward only if he had any reason to believe that the seller’s disclosures were false or inaccurate, and the only way he could be held liable for his statement in the notice is if it were shown to be untrue. Cf. Kubinsky v. Van Zandt Realtors, 811 S.W.2d 711, 714 (Tex.App.-Fort Worth 1991, writ denied) (holding that listing real estate agent has no legal duty to inspect listed property for defects over and above asking the sellers if such defects exist).

It is important to understand the promulgated forms of Seller’s Disclosure Notice contain minimum requirements.  Inadequate, outdated or incomplete disclosures frequently lead to  expensive legal problems. Thus, when in doubt about whether a duty to disclose exists, Sellers are wise to err on the side of full disclosure.