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

Since July of 2004, home sellers in Louisiana (including those selling without the assistance of an agent) have been mandated by the legislature 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.

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 Lisa Heindel, REALTOR®.

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

---

Copyright 2008, Lisa Heindel.  All rights reserved.