Real Estate Disclosure Laws Vary From State To State


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Real Estate Disclosure Laws Vary From State To State


Written By: Benny L. Kass
Tuesday, December 12, 2017

Question: I believe my house is haunted. Periodically, a door will slam or windows will mysteriously open when no one else is home. I plan to sell; do I have to disclose? Mary.

Answer: Dear Mary: For purposes of my response, I will accept your statement that your house is haunted. Frankly, I am a skeptic, and do not believe in such ghost stories.

But if thats what you believe, you have to find out whether your state has a law on this topic. To my knowledge, in most of the states you would not have to disclose. In Florida, for example, there is a specific statute that protects home sellers and their real estate agents from liability by not disclosing.

In New York, however, if a home has a reputation of being haunted, it must be disclosed. Apparently, that law came out of a case where the home had significant media coverage about it being haunted.

So, if there has been no media coverage -- or your house does not have the reputation of having ghosts -- depending on your state law, you do not have to disclose.

Your buyers may be upset, but if you dont have to disclose you are legaly protected.

Question: I have a business I run from my home and use part of the recreation room for keeping records and filling orders from customers. Can I claim a home office deduction? Terrance.

Answer: Depends on the facts. The law allows you to claim the deduction if the office space is used "regularly and exclusively" for your business. If there is other use in that room such as watching TV -- you will not qualify. You can, however, isolate a space in that room even though others may be watching the television -- so long as it is "exclusive".

There is a formula the IRS has authorized to simplify how to calculate the deduction and it is explained in IRS publication 587, "Business Use of Your Home". It is available free on line from irs.gov/publications.

Question: I am the Treasurer on my large 100 unit condo association board. Our management company has been managing the complex since the units were built in the late 1980s. The management contract, which took me forever to get a copy of, renews every three years automatically if no changes are made. It is next up for renewal in April of 2019.

As a board, what steps do we need to do to open this up to bid to other property management companies? Obviously we have no experience in this, as weve never changed companies. Is this something the board should do independently of the current management company? Were concerned that if we dont dot every "i" and cross every "t", our current firm will use that as an excuse to void any agreement we might make with a new property management company. Mike.

Answer: Mike, selecting a management company should not be any different than selecting a landscaper, or a contractor for a large job. Typically, the managing company will solicit two or three bids and then make a recommendation for the Board to decide. However, if you pass this task on to your management company, even if they do an honest search, there will always be the perception that they dont want to lose the job.

So, the board should create a three-member management committee -- could be from board members only or other interested owners -- to solicit bids. If you dont have a current list of property managers in your area, contact the Community Association Institute caionline.org for such a listing.

Prepare a letter spelling out who you are, how many units, what you are looking and ask for a bid response. You should list a contact person because most management companies will want to inspect the property first.

Give them a four week deadline. I would also send it to your current manager and ask them to submit their response. Once you get some responses, review them carefully, talk with other associations they manage, and then make your decision.

Caution: do not decide on price along. Remember the old saying: "you only get what you pay for".

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Updated: Sunday, December 17, 2017

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