A disclosure agreement in a real estate transaction is a legal document that is used by a buyer and seller to disclose all known facts and conditions that could affect the value or desirability of the property. It is typically executed by the seller and provided to the buyer during the due diligence period of the transaction.
A disclosure agreement can cover a wide range of issues, including the condition of the property, any defects or deficiencies, history of repairs or renovations, known environmental hazards or zoning restrictions, and any pending legal actions or disputes related to the property.
By entering into a disclosure agreement, both the buyer and seller are protected in the real estate transaction. For the seller, it provides a layer of legal protection from future liability arising from unknown or undisclosed issues related to the property. For the buyer, it ensures they are fully informed of any potential issues with the property before they complete the transaction, allowing them to make an informed decision about whether or not to proceed with the purchase.
However, it's important to note that a disclosure agreement does not provide complete protection against all forms of liability or guarantee that there are no hidden issues with the property. The agreement only covers known issues and defects that are disclosed by the seller.
If a buyer discovers an issue with the property after the sale is completed that was not disclosed in the agreement, they may still have legal recourse. In this case, it is important to consult with a licensed attorney to discuss potential legal options.
In summary, a disclosure agreement is a legal document that protects both buyers and sellers in a real estate transaction by disclosing known issues related to the property. However, it's important to understand that it only covers known issues and does not provide complete protection against all forms of liability.
By