So, what happens if you are just careless in filling out the required Louisiana property disclosure?

Let me tell you a quick story.

A young lady purchasing her first home contacted us recently.  She had very specific criteria for what she was looking for, from the number of bedrooms and bathrooms to the neighborhoods she was interested in.  One of her hot button issues was the flood zone.  She was adamant that any home she purchased must be in flood zone B or flood zone X and did not want to see any home outside of those zones, no matter how beautiful or well priced it might be.

Since many sellers don’t bother to complete that portion of the disclosure statement (I don’t know why, it’s not a secret!), lots of time was spent calling listing agents to have their sellers check their records for the flood zone.  Flood zones on the West Bank can vary from block to block within the same community, so we cannot just assume that one house is zoned the same as another in the area. 

Finally, we found several homes that met her needs AND were located in the right zones.  She narrowed down her choices, picked her absolute favorite and successfully negotiated an offer with the seller.  Inspections were done and repairs were negotiated as well.  Everything was going along just fine.

Until she started pricing flood insurance.

It turns out that the home she had fallen in love with was not located in a B or X zone and she could not get a preferred rate on her premiums.  As a matter of fact, her flood insurance would be about 3 times more expensive than she had planned for.  I did mention that she’s a first time home buyer, right?  This turned out to be a deal breaker.

The end result was that the contract was canceled and the seller is now out of pocket several hundred dollars for the cost of inspections in addition to losing marketing time while the home was under contract.  Why?  Because the buyer argued (and rightfully so) that she would never have even looked at this particular home, much less made an offer on it, if she had been given accurate information from the beginning. 

Don’t fall into the trap of just assuming that you remember everything about your home.  I can’t tell you how many times I’ve heard sellers say “oh we just replaced that hot water heater a couple of years ago” only to find that the tag on it is 10 years old.  Completing your disclosures can be a long and tedious process, but doing it correctly can save you money in the long run.

Ready to sell your West Bank home?  Contact the West Bank Living Team for professional guidance through the entire marketing and sales process. 

FIRST, it is important to point out that under Louisiana law, sellers (with few exceptions) are required to provide a property disclosure, whether they are selling the property “as is” or not.  Disclosing or selling “as is” is not a one or the other decision.   Unless you are one of the few who meet the state mandated exceptions, you MUST provide a disclosure to all purchasers.  The law applies equally to those using a professional REALTOR® and those attempting to sell their property on their own.

• For details on what has to be disclosed when selling your West Bank property, read more about Louisiana property disclosures here.
• For a list of those exempt from providing a property disclosure, contact Lisa Heindel.

As a listing agent, I always recommend that my sellers transfer their Louisiana property to the new owners with an As-Is Clause and Waiver of Redhibition.  (For people living in other parts of the country, Redhibition is basically the Louisiana civil version of a lemon law, allowing purchasers to sue for unseen defects.)  The waiver of redhibition is intended to minimize the number of lawsuits brought by purchasers against the sellers of real property in Louisiana. 

IMPORTANT NOTE:  This does NOT mean that the purchasers cannot do inspections or that they cannot walk away from the purchase if there are inspection issues that cannot be resolved by negotiating repairs or a price adjustment.

It does mean that after inspections have been completed to the purchaser’s satisfaction the following language will become a critical part of the act of sale documents (the highlights are mine).

From the Louisiana Real Estate Commission Website:

Do you still have questions about As Is and Waivers of Redhibition? Please contact Lisa Heindel, REALTOR®.  I’d be happy to refer you to a local real estate attorney who is well versed on this topic.

In case you missed them, here are the other parts in this series:

Louisiana Property Disclosures Part 1 – Yes, You Have to Disclose That!

Louisiana Property Disclosures Part 2 – Bugs, Bugs and More About Bugs

Louisiana Property Disclosures Part 3 – Structure

Louisiana Property Disclosures Part 4 – Plumbing, Water, Gas and Sewerage

Louisiana Property Disclosures Part 5 – Do You Have Power?

Home sellers in Louisiana (including for sale by owners) are required to provide a property disclosure prior to a potential buyer making an offer to purchase.  This mandate applies not only to sales, but also to exchanges, bond for deeds and lease purchase options.

If the property disclosure is supplied to the purchaser after an offer is received, the purchaser can terminate the purchase agreement without penalty up to 72 hours after receipt.  This means that no matter what terms are written in the sales contract, the purchaser can demand the return of their deposit and cancellation of the purchase agreement if the disclosures are not signed at the time an offer is submitted

Our final section of disclosures is a catch all of questions about your home – the Miscellaneous section.  The fact that they are in the miscellaneous section does not mean that these questions are not just as important as all of the others on the disclosures!

Has there ever been property damage to the land or improvements? This is a very broad question that needs to be specifically answered.  Any prior damages to the property need to be disclosed.  For example, in my own home, I had a plumbing backup that caused water damage to the flooring in 2 rooms.  After the plumbing repairs were done, the flooring was replaced.  If I ever sell my home, I will need to disclose this, even though it happened over 5 years ago. Any problems that led to an insurance claim should absolutely be disclosed – insurance companies have a database of claims relating to a property!

If yes, were all damages repaired? In the comments section, explain how the damages were repaired.  In my example it would be damaged flooring removed, slab cleaned and disinfected and new flooring installed.

What is the zoning of the property? This is particularly important when selling vacant land, since zoning restrictions may prevent a buyer from using the property in a manner they plan to.

Has it ever been zoned for commercial/industrial use or is it located in a historical district? It is important to note if a home is located in a historical district, since there are strict regulations regarding exterior changes to those properties.  Again, a purchaser needs to be aware of any limitations on their use of or ability to alter the property.

Does the property and its present usage conflict with zoning, building or safety restrictions? If you own a property that has been granted a special zoning status, this needs to be disclosed, since that status may not be transferable to a new owner.

Are there any current or pending assessments, dues, liens, taxes owing on the property? If so, you should know that the title company will require these to be paid prior to or at the act of sale in order to provide a clear title to the new owner.

Is membership in an HOA, COA or POA required as a result of owning this property? If yes, copies of the appropriate association documents should also be included with the disclosure.  Potential purchasers need to review these documents to fully understand any restrictions that exist when owning the property.

Are any HOA, COA or POA dues required? Some associations have voluntary but not mandatory dues.  If dues are mandatory, this must also be disclosed.

If yes, what is the amount? The current amount of annual or monthly dues.

Are there any pending special assessments? If you know of any pending special assessments, this must also be disclosed.  For example, a HOA may have approved a special assessment to be charged to home owners for upgrades to community amenities that has not been assessed yet.  Buyers need to know if there will be any additional costs involved with owning the property.

If yes, what is the amount? The exact amount of the pending assessment must be disclosed.

Were any additions or alterations made to the property? Any changes made to the original structure should be disclosed.  For example, a sun room that was enclosed to make a den or an attached garage that was converted to additional living area are alterations that need to be disclosed.

If yes, were the necessary permits and inspections obtained? Often in the New Orleans area, sellers do not know if the permits and inspections were obtained by previous owners for alterations or additions to the property.  Buyers should not be alarmed by an answer of NK to this question, but sellers should be aware that if they have made changes without permits and inspections, this needs to be disclosed to avoid future problems.

Is there a homestead exemption in effect? This question is especially important in Orleans Parish, where property taxes are paid in advance.  At the act of sale, property taxes are pro-rated between the buyer and the seller – if there is no homestead exemption in effect, this will mean a higher rate of taxes will be paid by the purchaser at closing.

Note to buyers: Be sure to file your homestead exemption as soon as possible after your sale is recorded!  This exemption saves you approximately $900 per year in property taxes, but can only be used for your primary residence.

Is there high speed internet access available to the property? If there is cable TV service available to the area, then there is high speed internet access as well, even if you don’t currently have this service.

Is there any pending litigation regarding the property? Any pending lawsuits must be disclosed, including if the home is currently in the process of foreclosure, even if it has not been foreclosed on yet.

Does the property or any of its structures contain any of the following? Here is your laundry list of potential hazards that must be disclosed to a buyer.  If any of them exist, they must be fully outlined in the explanations section.

This brings us to the end of this series about property disclosures in Louisiana.  I hope that I have impressed upon you how CRITICAL it is to truthfully tell potential buyers everything you know about your home!  If you need assistance with understanding how Louisiana property disclosure laws apply to you when selling your West Bank home, feel free to contact Lisa Heindel, REALTOR®. I’ll be happy to help!

Download the most current Louisiana Property Disclosure

Louisiana Property Disclosures Part 1 – Yes, You Have to Disclose That!

Louisiana Property Disclosures Part 2 – Bugs, Bugs and More About Bugs

Louisiana Property Disclosures Part 3 – Structure

Louisiana Property Disclosures Part 4 – Plumbing, Water, Gas and Sewerage

Home sellers in Louisiana (including for sale by owners) are required to provide a property disclosure prior to a potential buyer making an offer to purchase.  This mandate applies not only to sales, but also to exchanges, bond for deeds and lease purchase options.

If the property disclosure is supplied to the purchaser after an offer is received, the purchaser can terminate the purchase agreement without penalty up to 72 hours after receipt.  This means that no matter what terms are written in the sales contract, the purchaser can demand the return of their deposit and cancellation of the purchase agreement if the disclosures are not signed at the time an offer is submitted

Are there any defects with the electrical system? As always, if you know of an existing issue, it must be disclosed to any potential purchaser.  Additionally, most insurance companies are asking about upgrades to electrical systems before issuing policies.  If you have updated any of the electrical components in your home (for example, changing the fuse panel to a breaker box) it’s a good idea to put this in the explanation section.

Are there any defects with the heating or cooling systems? I hope that you have been having your air conditioner and heater checked and serviced annually by a licensed A/C and heat contractor.  If not, I advise having the system cleaned and serviced and checked for any leaks prior to putting your home on the market.

What type of cooling system is installed?  Choose the type of system in your home.  If there are multiple systems, use the explanation section to outline them in detail.

What type of heating system is installed? Choose the type of system in your home.  Again, if there are different types of heating installed in different areas of the home, use the explanation section to outline them.

If a fireplace exists, is it working? This is an important question in the New Orleans area, since many of our historic homes have the original mantles and fireplace openings, but the fireplaces are purely decorative and not functional.

Are there any defects in any permanently installed or built-in appliances? If you know that the self cleaning function on your oven doesn’t work, this is the time to disclose it to any potential buyers.  Again, this form is to protect your interests, as well as inform the buyer about the condition of the home.

Stay tuned for our final installment:   Miscellaneous (or, all of the rest of the things we need to know about your house).

Do you need assistance in understanding or completing a Louisiana property disclosure form?  Feel free to contact the West Bank Living Team.  We’d be happy to answer any questions you may have.

Download the most recent Louisiana Property Disclosure Form

Louisiana Property Disclosures Part 1 – Yes, You Have to Disclose That!

Louisiana Property Disclosures Part 2 – Bugs, Bugs and More About Bugs

Louisiana Property Disclosures Part 3 – Structure

Part 4 of the property disclosure deals with plumbing, water, gas and sewerage.  Here is a snapshot of the form:

Y = Yes     N=No    NK=No Knowledge

Are there any defects with the plumbing system? If you know that there are any cracked or broken water or sewerage lines, it is imperative that you disclose this upfront since it can have a major impact on whether or not a buyer is willing to purchase your home and the price they are willing to pay for it.  Providing estimates for repairs as an attachment to the disclosure is always a good idea, since buyers will usually over estimate their costs.  If there are any defects, consider correcting them before putting your home on the market.

Are there any defects with the water piping? Again, disclose, disclose, disclose.  These questions are designed to keep you from being involved in litigation about defects that were known to you and not disclosed to the buyers.

Are there any defects with the water quality, quantity or pressure? Typically, we don’t see “Yes” answers to this question in the New Orleans metro area, but since some parts of the city continue to have issues with water pressure, be sure that you answer this question carefully.

Water is supplied by: Choose the appropriate option for your property

If there is a well, when was the last time it was tested and what were the results? Provide the date of testing and the results.  Attaching a copy of the test results to the disclosure is always a good idea and can prevent misunderstandings on the part of the potential buyers.

Is there gas service available to the property? Even if you have all electric appliances, there may still be gas service run to the property.

Are there any defects with any water heater? Water heaters are an item that almost always come up in inspection reports, with issues from improper ventilation to no overflow valves.  If your water heater is old, it may be worth replacing prior to the sale of your home.

The sewerage is supplied by: Choose the appropriate option for your property

Stay tuned for our next segment – Electrical, Heating and Cooling, Appliances

If you need help with understanding property disclosures in Louisiana, please feel free to contact the West Bank Living Team. Protecting your interests during the sale of your West Bank home is important to us!

Download the most current Louisiana Property Disclosure form

Home sellers in Louisiana (including for sale by owners) are required to provide a property disclosure prior to a potential buyer making an offer to purchase.  This mandate applies not only to sales, but also to exchanges, bond for deeds and lease purchase options.

If the property disclosure is supplied to the purchaser after an offer is received, the purchaser can terminate the purchase agreement without penalty up to 72 hours after receipt.  This means that no matter what terms are written in the sales contract, the purchaser can demand the return of their deposit and cancellation of the purchase agreement if the disclosures are not signed at the time an offer is submitted.

A known defect is defined as:  A condition found within the property that was actually known by the seller and that results in one or all of the following:

• It has a substantial adverse effect on the value of the property
• It significantly impairs the health or safety of future occupants of the premises
• If not repaired, removed or replaced, significantly shortens the expected normal life of the premises

The next part of the structure section addresses specific concerns about the property and its condition:

Has any structure ever taken on water by flooding (rising water or otherwise)? Once again, I will remind you that it is imperative to be honest in answering these questions.  Any flooding, even if was way back in 1965 for Hurricane Betsy, needs to be disclosed and fully explained to potential purchasers.  Additional explanations can include drainage improvements made by the city or parish since that time.

What is the approximate age of all structures? Oftentimes, a garage or shed has been added since the original construction of the home, so there may be a difference in ages between structures on the premises.

What is the approximate age of the roof of each structure? Again, there may be an age difference between the roof of a home and the roof of a garage, guest house or shed.

Does the property contain EIFS or other synthetic stucco? Given the troubled history of EIFS in Louisiana with our almost constant humid and moist climate, purchasers may want to have a stucco inspection performed on properties containing this product.  It is imperative to disclose the existence of any form of synthetic stucco on a property.

What is the approximate square footage of the living area of each structure? What is the source of this information? If you have builder’s plans or an appraisal, the square footage can be taken from these sources.  If you do not have this information, your agent can measure the property for you and be cited as the source.

NOTE TO BUYERS:  Many square footage measurements in Louisiana are provided by the listing agents and should be considered an estimate, not a guarantee, of the living area of a home.  Your appraiser will provide you with a more precise square footage measurement.

Our next installment of Louisiana property disclosures will deal with Plumbing, Water, Gas and Sewerage.

If you need assistance with understanding the disclosure laws in Louisiana, please contact the West Bank Living Team.  We’d be happy to explain these forms in more detail to you.

Download the most current Louisiana Property Disclosure form

Remember, home sellers in Louisiana (including for sale by owners) are required to provide a property disclosure prior to a potential buyer making an offer to purchase.  This mandate applies not only to sales, but also to exchanges, bond for deeds and lease purchase options.

If the property disclosure is supplied to the purchaser after an offer is received, the purchaser can terminate the purchase agreement without penalty up to 72 hours after receipt.  This means that no matter what terms are written in the sales contract, the purchaser can demand the return of their deposit and cancellation of the purchase agreement.

Our next section of disclosures involve termites and other wood destroying insects. While termites aren’t anybody’s favorite topic, they are a fact of life in Louisiana, especially in the New Orleans area.  It is important to be painfully honest on your disclosure statements!  Believe me, more often than not, home and termite inspectors find evidence of previous damage that sellers may not have even known existed.

It is only in the last 15 years or so that having a professional home and termite inspection became the standard practice during the home buying process.  Before then, buyers looked at houses and bought the one they liked.  No inspections, no disclosures, and no real information except what you could visibly see.  Now, it is imperative that you disclose everything you know about a property.

Here is a snapshot of section 2 of the property disclosure:

Y = Yes, N=No, NK=No Knowledge

Has the property ever had termites or other wood destroying insects? Don’t be afraid to say Yes!  Most termite inspectors will tell you that there are 2 kinds of houses in the metro New Orleans area – those that HAVE termites and those that WILL have termites.  The fact that you may have had termites in the past will not put your house on the back burner for most educated buyers.

Was there any damage to the property? Again, be honest.  If you had termites and there was damage as a result, you will need to provide an explanation for the buyers.  When, where and how are the rules – when did the damage occur, where was the damage and how was it repaired.

Was the damage repaired? This ties directly to the question above and savvy buyers will want a complete explanation, not just a check mark in the Yes box.

Is the property currently under termite contract? If so, with what company, when does the contract expire and what structures are covered by the contract? Although it amazes me, there continue to be many homes not covered by an annual termite contract.  If you don’t have a contract and active termites are discovered during inspections, rest assured that you will be treating the property before any mortgage company will be willing to take it as collateral for a mortgage loan.

Stay tuned for the next installment:  Structure

If you are considering selling your West Bank home and would like more information on the required disclosures or a referral to a great termite guy, contact the West Bank Living Team. We’d be happy to help!

Download the most current Louisiana Property Disclosure Form

If the property disclosure is supplied to the purchaser after an offer is received, the purchaser can terminate the purchase agreement without penalty up to 72 hours after receipt.  This means that no matter what terms are written in the sales contract, the purchaser can demand the return of their deposit and cancellation of the purchase agreement.

So, what kind of questions will your REALTOR® have you answer before putting your home on the market?

The first section of the property disclosure has to do with the land.  Here is a snapshot of the form:

Why is this information important?

Questions 1-3:  Obviously, a potential purchaser wants to be sure that they have full and unlimited use of the property once purchased.  If someone else owns any rights to the land, it must be disclosed.  Also, if a property has been determined to be a part of a wetland, there may be portions that cannot be built on or developed which must also be disclosed.

Questions 4-6:  The risk of flooding in southeast Louisiana is high, and all purchasers have the right to know about the history of the property to the best of the sellers knowledge.  Information on flood zones has become critical in a post-Katrina environment.  Flood zone information can be obtained from your insurance policy or agent or by visiting the FEMA Flood Map Center.

A fairly recent addition to the disclosure is the question regarding the existence of a flood elevation certificate.  Insurance companies are now requiring flood elevation certificates prior to issuing new policies – if you have one to share with the buyer, it can speed up the process of obtaining insurance on the property and getting to a successful closing.

A “Yes” answer to any of these questions will also require you to further explain it.  For example, if the answer is Yes to flooding of the land, when did the flooding occur?  Was it a one time event or is it an ongoing problem?

But I’m Selling As-Is!

Although the majority of homes in Louisiana are sold “As Is”, this does not mean that you do not have to disclose what you know about the property.  Besides being the law, a full and complete disclosure can save you headaches in the form of lawsuits later on down the road.  If you have any questions about completing the Louisiana Property Disclosure form, please feel free to contact the West Bank Living Team.

Stay tuned for our next installment – Termites and Wood Destroying Insects

Download the most current Louisiana Property Disclosure Form