As a result of a new law enacted in Pennsylvania, the Pennsylvania Real Estate Seller Disclosure Act (RESDA), sellers are now required to provide the buyer of their home with a comprehensive, detailed, written disclosure of the condition of the property to be sold. This new law is intended to assist prospective buyers in evaluating the property they are considering to purchase. The RESDA, which took effect on September 2, 1996, not only places new responsibilities on home sellers, it also places new responsibilities on real estate brokers and their agents.

Certain types of transfers are exempt from the requirements of the RESDA, including:

• transfers pursuant to a court order
• transfers by a fiduciary in the course of the administration of a decedent's estate; transfers made to a spouse or to a person or persons in the lineal line of consanguinity of one or more of the transferors;
• transfers between spouses resulting from a decree of dissolution of marriage or a decree of legal separation or from a property settlement agreement incidental to the decree;
• transfers by a corporation to its shareholders pursuant to a plan of liquidation, or by a partnership to its partners pursuant to a plan of liquidation;
• transfers of new residential construction which has not been previously occupied when:
  • the buyer has received a one-year written warranty covering the construction;
  • the dwelling has been inspected for compliance with the applicable
  • building code or, if there is no applicable code, for compliance with a nationally recognized model building code; and
  • a certificate of occupancy or a certificate of code compliance has been issued for the dwelling.

Essentially, the RESDA requires sellers to disclose to the buyer any "material defects" with the property by completing a property disclosure statement prescribed by the RESDA. A "material defect" is defined in the RESDA as "a problem with the property or any portion of it that would have a significant adverse, impact on the value of the residential real property or that involves an unreasonable risk to people on the land." It is the obligation of real estate brokers and their agents to advise the seller of the seller's obligations under RESDA and to provide the seller with the disclosure form.

The RESDA does not require that a seller obtain an inspection. It does, however, require the seller to disclose to the buyer all known material defects about the property that are not readily observable. Buyers should know that the protections of the RESDA are not a substitute for inspections or warranties the buyer may obtain. Nor is the disclosure statement a warranty by the seller, or a warranty or representation by the listing or selling real estate broker or their agents. The disclosure statement must be given to the buyer prior to the signing of a written agreement of sale and must be signed and dated by the buyer indicating his receipt and acknowledgment.

The disclosure form, though not exhaustive, specifically includes questions about most all areas of concern to buyers, including the condition of the roof, basement, water and sewage systems, plumbing, heating and air conditioning, electrical system, appliances, smoke detectors, structure and even the land surrounding the house. If any of the information completed by the seller subsequently becomes inaccurate, the seller is obligated to notify the buyer. The RESDA does not specify when this obligation to notify the buyer ends, but it is believed to expire at closing.

Homeowners who thought they knew everything about their property may be surprised to see just how much they do not know when they sit down to complete the RESDA disclosure form.

Only time will tell whether the additional disclosures and paperwork imposed upon home sellers by the RESDA will lead to more informed buyers and less post transfer disputes between sellers and buyers.