Search Site
Menu
Environmental Disclosure Statements

March 8, 2001

Disclosure Statements Help Buyers Beware

By Stuart Lieberman, Esq
Realty Times

Emotions and sound investing do not always go well together. A great business idea may prove to be lousy after the written business plan is evaluated. Even though we all know better, sometimes we defer to our instincts and emotions alone, without asking for the needed backup documentation.

Perhaps our deference to our gut feelings is no stronger than when it comes time to buying a new home; especially if the home will serve as a primary residence. Shelter is, after all, next to clothing and food one of those basic essentials. While our homes may end up being a good investment, we want so much more out of a home than just an investment.

So when it comes time to making a purchase decision, I think that for many people their emotional side plays a more active role than their business sense. People do not want to ask the truly hard questions which may in the long run prove to have been questions that should have been asked. What about former underground tanks? Are there lead problems? Are their mold or fungus problems? Are their noxious smells from a neighborhood factory (a good question to ask because many people go house hunting on the weekend, when factories may not be operating)? Are there hazardous sites within a two mile radius of the home?

Home contracts often contain a “no representation” clause which provides that the seller is not making any statements, one way or the other, about these issues. Many contracts provide buyers with a due diligence period where they can hire a company to determine if these kinds of problems are present. But if you hire an inferior inspector, he or she may miss a problem. Even in the case of a really good inspector, some problems are just not easy to find.

For example, a home that depends on a well to supply drinking water may produce water with high bacteria levels after heavy rainfalls due to nearby agricultural activities. An inspector may suggest that the water be tested, but if the test is taken during a dry spell, nothing will be learned.

This is why I applaud the use of mandatory seller disclosure forms in real estate transactions. These forms are often routinely used by brokers. The form can vary, but it is often a check off list filled with all kinds of possible problems that can be attributable to a home purchase. This list will often cover important environmental problems, such as dirty drinking water, leaking oil tanks, radon, etc.

The seller must state on the form whether he or she has knowledge of any of these problems. The seller signs and dates the form, and often the form contains a statement that the seller knows that the buyer is relying on the form’s contents. Buyers should like this form and should insist on it. It provides another layer of protection for them. And brokers, both seller and buyer agents, should want this form as well. It provides them with an added measure of legal protection.

Disclosure forms never replace a due diligence inspection. They are used in conjunction with such inspections. Of course, we all know that people sometimes sign things that are not exactly true. If that happens, and you can prove that a true attempt at deception occurred, you may have legal recourse against the seller in the form of a fraud claim, a claim for negligent misrepresentation, as well as claims under some state consumer fraud acts. Often treble damages (three times the cost of harm) and attorney’s fees may also be recovered.

While disclosure forms may provide buyers with legal protection, they do the same for sellers. A seller who fully discloses does not have to worry about an allegation that something was withheld should a problem develop after the sale. By far the best use for these form is not court related, but information related. They provide a clear way for buyers and sellers to learn about and comprehend key issues relating to an important transaction.

Our Attorneys

Recent Twitter Posts

  • Newark and Camden receive $400K each to clean up contaminated sites. https://t.co/x3V6AZHkOb
    5 days ago
  • Murphy Administration rejects golf course expansion onto Liberty State Park. https://t.co/cy8lGbz1uJ
    2 weeks ago
  • Preservationists score big win in fight to protect Princeton Battlefield. https://t.co/80vdiYX0GQ
    3 weeks ago
  • Glass recycling plant breaks ground on former quarry land in Sussex County. https://t.co/puNFMPIaOe
    3 weeks ago

Recent Blog Posts

United States Supreme Court Tackles Key Clean Water Act Judicial Review Issue

National Association of Manufacturers v. Department of Defense, et al. 583 U.S. ____ (2018) Decided January 22, 2018 Since the passing of the Clean Water Act in 1972, the definition of “the waters
Read More
United States Supreme Court Tackles Key Clean Water Act Judicial Review Issue

New Jersey Voters to Decide Important State Constitutional Amendment concerning the Environment

On Tuesday, November 7, 2017, New Jersey voters will be asked to decide on a state constitutional amendment regarding the use of natural resource damages collected by the State in
Read More
New Jersey Voters to Decide Important State Constitutional Amendment  concerning the Environment

Appellate Division Case Demonstrates Importance of Carefully Negotiated Escrow Agreements

Real estate transactions involving commercial and residential properties frequently employ the use of escrow agreements to address potential environmental issues.  This practice is widespread in New Jersey and it permits
Read More
Appellate Division Case Demonstrates Importance of Carefully Negotiated Escrow Agreements

NJDEP Updates Soil Remediation Standards for 19 Contaminants

Effective September 18, 2017, new soil remediation standards govern the cleanup of contaminated sites in New Jersey.  The New Jersey Department of Environmental Protection (“NJDEP”) recently updated remedial standards for
Read More
NJDEP Updates Soil Remediation Standards for 19 Contaminants

In the media

  • Gulf Coast Town Center facing foreclosure

    Naples Daily News, September 16, 2015

    Wells Fargo filed a lawsuit Sept. 8 against an affiliate of CBL & Associates, the owners of the decadeold, 1.2 million-square-foot mall in south Fort Myers for a $190.9 million unpaid loan. The center has 94 stores on 204 acres, with such anchors as Super Target, Belk, Best Buy, Dick’s Sporting Goods, Marshalls and Costco...

    Read More
  • Town liable for private company's leaking underground tanks, court rules

    NJ.com Jul 26, 2017

    CRANFORD -- A couple that owned a businesses in town and became sick from leaking underground tanks owned by an adjacent business can sue the township for damages because the tanks were partially ...

    Read More
  1. 1
  2. 2
  3. 3
  4. 4
  5. 5
Contact Our Firm

Quick Contact Form