DISCLOSURE REQUIREMENTS FOR HOME SELLERS IN COLORADO

The doctrine of law followed in Colorado is that of "implied habitability" rather than "caveat emptor". In plain English, it means that home sellers are presumed to be selling a home that is functional, structurally sound and habitable unless the seller otherwise tells the buyer. This means that home sellers must disclose any significant problems they've had with their homes and what (if anything) they did to remedy the problems. Home buyers, of course, should ask the sellers about any specific questions they might have; but in the absence of disclosure, may presume that the seller is not withholding information about any significant defects the seller is aware of.

Note that in Colorado, home sellers and Realtors are not responsible to disclose any defects about which they have no knowledge. This seems only rational, but in California, for example, home sellers and Realtors are responsible to disclose any defects about which they should have had knowledge. Big legal difference.

Here's where disclosure requirements enter a transaction.

Inspection paragraph. Paragraph 10 of the Colorado Real Estate Commission-approved Contract to Buy and Sell Residential Real Estate form allows for the buyer to inspect the property within a given time (Objection Deadline) and for buyer and seller to agree by a given time (Resolution Deadline) on repairs, if any, to be completed by closing. Buyer's inspection rights are virtually unlimited under this provision.

Sellers Property Disclosure form. Seller must complete a Colorado Real Estate Commission-approved form, called a Seller's Property Disclosure, that asks seller about appliances, electrical/plumbing/heating systems, roof and site conditions. Buyer receives a copy of this form and may rely on seller's representations in determining whether property condition is satisfactory.

Lead-Based Paint. The seller of a house built prior to 1978 must complete a Lead-Based Paint Disclosure that asks if seller is aware of any lead-based paint on the property or any reports that were ever issued about lead-based paint on the property. The buyer of a home built prior to 1978 must receive the Lead-Based Paint Disclosure, signed by seller, and have the right to inspect for lead-based paint during the inspection of the property.

Radon. The Environmental Protection Agency has stated that 4.0 picocuries/litre of air-borne radon is the maximum safe level in a home. As part of the inspection process, buyer is allowed to test the air inside the home and seller is usually responsible for "mitigating" or reducing the radon level if the test determines a radon reading of over 4.0 pc/l.

Wells and Septics. Both buyer and buyer's lender are usually interested in obtaining reports indicating that the well and septic systems are operating satisfactorily. Seller usually pays to have the septic tank pumped clean and buyer generally pays for the tests, including well yield, water potability and septic inspection.

Title examination. While the title exam in most metropolitan areas is usually routine, it is an important and sometimes challenging part of buying and selling mountain property. Driveways that encroach on neighbors' lots, utility easements that run through the middle of homes and lack of legal access to a county or state road are examples of thorny issues that the rural home buyer and home sellers must be vigilant in looking for.

Home sellers and home buyers should be aware that these disclosures and inspections are a necessary part of any successful real estate transaction and should appropriately look to their Realtor for guidance and assistance.


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