Property Inspections and Disclosures

Let's Talk About......Property Inspections and Disclosures
By: Alan Orlowsky
A version of this article was published in the Pioneer Press, January 3, 2002. Debra Fox, Attorney at Law, helped prepare this article.

Before you buy a home, understand the seller's obligation to disclose defects, and your right to inspect. 

In many cases, people are so in love with a house or condo, and they're so eager to sign a contract and close the sale, that they gloss over the inspection process. Often, when they are advised by an inspector that there might be a significant defect such as a leak or a boundary dispute that's worth investigating further, they tend to downplay it or even ignore it rather than risk delaying -- or worse, scotching -- the deal.

That kind of wishful thinking and denial sometimes lands buyers in a heap of trouble. Once you close the deal and move into the place, if you find a defect and suspect the sellers of fraudulently concealing it, your remedies are much more limited than if you had discovered it (or addressed the issue) well before closing. Fixing a serious defect such as asbestos or water contamination could cost you tens of thousands of dollars. In the worst cases, families have had to move out shortly after moving in, due to such a catastrophe.

The bottom line is, don't rush through the inspection process. Read the seller's disclosure statement carefully and critically, ideally before you make an offer. Never sign a contract that doesn't contain an inspection contingency. Hire a competent home inspector -- and if necessary a specialized engineer -- and thoroughly investigate all indications of a possible defect. If you discover a defect that wasn't disclosed, pursue remedies immediately. Here is an explanation of the law and available remedies:

Disclosure rule

The Illinois Residential Real Property Disclosure Act (RRPDA) requires sellers to complete a disclosure report indicating whether they are aware of any "material" defects in the home or on the property.

The term "material" isn't defined by the Act, but such defects may include:

• Flooding or recurring leaks in the basement; property located in floodplain
• Cracks or other defects in basement walls or foundation
• Roof or ceiling leaks
• Defects in plumbing, electrical, heating, ventilation, air conditioning, or sewer systems
• Lot line or boundary disputes
• Presence of asbestos, lead-based paint, water contamination, high levels or radon
• Underground storage tanks that may leak

Many sellers complete the disclosure form and give it to their Realtor as soon as they put their house or condo on the market. They should make the report available to prospective buyers at the outset. According to the RRPDA, they must provide this information to prospective buyers before entering into a contract with the buyer. But as a matter of common law, the buyer may decide to waive this requirement, although it's usually not a good idea. If they provide the disclosure report after you sign a contract but before closing, you have three business days in which to rescind the contract if you're not satisfied with the report.

Law or no law, you should ask to see the disclosure form before you make an offer. If the seller´s Realtor refuses to show it to you at this point, ask why. If the reason doesn't seem to make sense, you may still decide to go forward with an offer, but be wary and give yourself plenty of time for an inspection and, if necessary, rescission.

If you see the disclosure report and it contains a defect that you're not willing to live with (literally), you have three options: ask the seller to fix the defect at their expense, decide that you will bear the expense of fixing it, or withdraw your offer.

If you have questions about this post or about a particular legal situation, please contact Alan Orlowsky by calling 847-325-5559 or visit our website http://www.orlowskywilson.com