Most residential real estate sales in Minnesota involve the use of a disclosure statement. A disclosure statement is a standard “fill in the blanks form” where sellers disclose the condition of the house. The form includes a checklist of features in the house and seller checks the box(es) in the form indicating whether the item is in good condition or bad condition.
A completed disclosure statement benefits both the buyer and seller. A completed disclosure statement benefits a buyer because it discloses the condition of the property. This helps a buyer know what work, if any, needs to be done on the property, and it can also help the parties determine a purchase price.
A completed disclosure statement benefits the seller by disclosing the condition of the property. This allows a seller to avoid a future claim that the seller misrepresented the condition of the property. The seller should be careful to accurately disclose the condition of the property. A seller should err on the side of disclosing a problem or potential problem in cases where a disclosure is questionable.
Most lawsuits by a buyer against a seller after the sale has been closed, involve a claim that the seller misrepresented the condition of the property based on the fact that the seller did not completely or accurately represent the condition of the property in the disclosure statement. A properly completed disclosure statement can help avoid such claims which benefits both parties.