Property Disclosures: Murders, Meth Labs, Structural Defects and Botched Renovations
Note: The following is for residential units in Connecticut of four units or smaller.
Connecticut General Statutes Section 20-327b is the "Residential Property Condition Disclosure Report." The seller is required to credit the buyer $300 at closing if the report is not furnished, but realistically, as a seller, if you don't fill out and provide the form as an attached MLS document, buyers will assume that you are hiding something and that's the reason you don't want to make the report available. This is a situation where an attorney would probably recommend, due to liability concerns, not to provide the report, but it isn't practical to exclude it. Offer the disclosure or face a tougher sell to a skeptical buyer!
In addition to the standard disclosure form, the seller must disclose known latent defects. A latent defect is a hidden structural defect that would not be revealed during an ordinary inspection. A buyer can cancel a contract or sue for damages if the seller neglects to reveal such a known defect. This also extends to known violations of zoning (e.g. illegal accessory apartment) or building codes. It is important to always apply for a building permit and pass building inspections when performing renovations.
There is also a burden on the real estate agent to discover and disclose any material facts that may affect the properties value or desirability, regardless of the seller knowing or disclosing these facts. If the real estate agent should have known that a material fact about a property was false, it is considered a negligent misrepresentation and the agent is culpable (subject to liability).
Disclosure of environmental health hazards which might render the property unusable to the buyers intended purpose require disclosure. For example, lead-based paint hazards need to be disclosed (a semi-complex topic to be covered in another post).
Real estate agents/sellers can provide a form indicating the availability of lists of superfund sites or other off-site environmental hazards and lists of properties where shooting or hunting take place in order to excuse them from the requirement to disclose such information directly.
Stigmatized Properties (psychologically impacted real estate)
A material fact is something that might change the mind of the purchaser or affect the price. Non-material facts do not need to be disclosed. Whether an occupant has or had a disease, emergency illness, or health condition listed by the Public Health Commissioner, or the fact that there was a death or felony on the property is considered non-material. If the buyer advises the owner or sales agent in writing that a murder, suicide or other felony is important to them, then such information must be disclosed.
For the record, a haunted house does not need to be disclosed.
Megan's law relates to the FBI and state's list of registered sex offenders.This information isn't required to be disclosed in Connecticut, but is available here.