“Good fences make good neighbors” is a saying that everyone has heard for many years and is mostly true, except when it isn’t. Within the last six months, we have had two clients that have had surprising problems with neighbors for houses that they are buying .
When we represent clients, both buyers and sellers, we have clients carefully review the Seller Disclosure Form, Form 17, and we stress the Neighborhood Review that is included in our Washington contract. For buyers, we recommend they review the neighborhood for sex offenders, criminal activity, commuting times and various other issues like parties, street lights or neighborhood covenants. With sellers, we recommend that they disclose any potential problems that a buyer might encounter that wouldn’t be readily obvious. Most of these issues are covered on the Form 17, the Seller Disclosure Statement, and it must be answered truthfully and completely by the seller. According to attorney Mark Schedler, withholding information about a home could be considered fraud and expose the seller to a law suit down the road.
Our buyers last week moved into their new home on Thursday night. On Friday morning, one of the neighbors next door knocked on the door and said that there was a boundary dispute that they had been discussing with the seller for three years and the neighbor wanted to know what the new owner was going to do about. What a way to get introduced to the neighborhood. What makes this situation interesting is that the neighbor didn’t have a survey, so couldn’t actually prove that there was a boundary dispute and second, the seller and the listing agent knew about the problem and didn’t disclose it to us, as the agents, or the buyer in the Form 17. Not good!
In another instance, we represented a buyer on a very high-end home a few months ago. When we put the “Sold” sign up after the inspection was negotiated, a neighbor called me and told me that there was a retaining wall belonging to the seller and it was falling down into his property. He went on to say that if it actually did fall down, the neighbor would sue the new owner. That caused a whirlwind of activity. The good news was that it was before closing, so we were able to have the seller address it by setting aside $30,000 to solve the problem. There are other stories. The message I want you to take away from this is that the burden of disclosure is on seller. For those things that the seller doesn’t know, the burden of discovery is on the buyer. Having surprises down the road just before or just after the house sells makes a miserable time for all!