Do heirs have to provide a seller’s disclosure notice?

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01/03/2017 | Author: Legal staff

The owner of a home recently passed away and left the property to her son and daughter. When listing the property for sale, do the son and daughter have to provide a seller’s disclosure notice?

Yes. As heirs, the son and daughter are required to provide a seller’s disclosure notice since there is no exemption for heirs under Section 5.008(e) of the Texas Property Code. Failure to disclose known material defects about the property would expose them to liability under the Deceptive Trade Practices Act or over civil laws.

Categories: Legal
Tags: legal, legal faq, seller's disclosure notice, seller's disclosure, disclosure


David Davis on 01/07/2017

Lisa Catlin,
Can the owner read, write, think, & reason on their own?  Here’s the thing.  It sounds as if to me your situation might qualify under “(5)  by a fiduciary in the course of the administration of a decedent’s estate, guardianship, conservatorship, or trust;” but is it worth risking?

Disclose the thing and be done with it!  How long does it take to fill out the form?  If the party has no knowledge, they have no knowledge.  What happens when six month after the sale some latent defect all of sudden comes up and now everybody wants to lawyer up and fight it out in court.

Without that Seller’s Disclosure Notice you the REALTOR® are more than likely going to be the one paying the bill!

Lisa Catlin on 01/07/2017

The owner is incapacitated and has a legal guardian.  The guardian has never lived in the home. The home will be sold under a court order. The guardian would be an heir but the owner is not deceased.

David Davis on 01/07/2017

Forrest Lunsford,
Then you should know the answer to your own question.  It is the very first question on the Notice after the address at the very top.

Forrest Lunsford on 01/07/2017

David Davis
I am a realtor. I try not to practice law.

David Davis on 01/07/2017

Forrest Lunsford,
They need to contact a REALTOR® to assist them.  What area are you located in?

Forrest Lunsford on 01/07/2017

I have 2 daughters. They know nothing about my holdings . How can they disclose anything about my property without making them liable?

Craig on 01/05/2017

Who is the seller listed on the contract?  If is “The Estate of…” or “Administrator of” or something like that, then no Seller’s Disclosure notice is needed.  If the estate has been settled and the person who received the property is now selling it, then a Seller’s Disclosure notice is needed.  Also remember that 11 exemptions are simply is in reference to using the actual form.  Even if the seller is an estate and exempt from using the form, disclosure of known material defects must still be shared with buyers.

David Davis on 01/05/2017

I going to venture way out on a limb here and guess that there is no one here that has done a transaction that actually meets the criteria in #5 as previously described.  In order for that to happen the sale would have to take place purely during probate, before letters testamentary (after which the heirs would then own the property and #5 would not apply).  Very few judges in Texas like dissolving estates that quickly during the probate process as they tend to fear foul play in the works.

If there’s an exception to my guess, please forgive me, but I couldn’t resist the chance at that guess!  I know, never say never, but you have to admit, this one is pretty close!

Rick Chumsae on 01/05/2017

David Davis is correct in reminding us of the 11 Exceptions.  I would think that an estate asset would be liquidated by the Executor, a position that meets item 5 in the list.  The Executor could be a person or firm named in the decedent’s designation of Executor or could be court-ordered if no Executor was named.  Since the property is being sold under the oversight of an Executor, no Seller’s Disclosure is required, even if the Executor lived in the house for many years.  The position exempts the Executor from the requirement to provide the disclosure.

Yes, the trick part is that if the property is left to the heirs, the ownership is is managed by the Executor and presented to the heirs (with no disclosure) amd the heirs now own it, and they are not one of the 11 exceptions, and so must provide the disclosure.

Lisa Catlin on 01/05/2017

If a property has been vacant for a year due to the owner having dementia and the owner is totally incapacitated, is the legal guardian who has never lived in the home required to prepare a Seller’s Disclosure?  The legal guardian lives in another county and has no knowledge of the condition of the vacant home.

Ryan Ward on 01/05/2017

I have a property in probabe since there was no will. The probate attorney is actually related to the family and will be a beneficiary. Once probate is completed then we will need a seller’s disclosure from the family?

Karen Dixon on 01/03/2017

I think this is not a straightforward question.  There are some unanswered questions.  If the property is in probate I would think a disclosure would not be required.  If the probate is finished and the heirs have assumed possession then that would require a disclosure.  I think this should be clarified as it is not clear what the circumstance is.

David Davis on 01/03/2017

Of course my response is an answer.  It comes directly from the Texas Property Code which governs this issue.  What would you think the answer to your question is?
If you need it more broken down:
1.  Go ask your broker (s)he makes the rules in the brokerage.
2. If you are the broker you should already know this, if not
3. Err on the side of caution, and disclose (CYA{Cover Your Assets])!

Alice Bruni on 01/03/2017

Your response is really not an answer.  You’re saying that an heir has to provide a disclosure but when the executor is an heir then what?  The executor/heir becomes the “fiduciary in the course of the administration of a decedent’s estate…..”?

David Davis on 01/03/2017

There are 11 instances when the Seller’s Disclosure is not required.  Only 11:

(1)  pursuant to a court order or foreclosure sale;
(2)  by a trustee in bankruptcy;
(3)  to a mortgagee by a mortgagor or successor in interest, or to a beneficiary of a deed of trust by a trustor or successor in interest;
(4)  by a mortgagee or a beneficiary under a deed of trust who has acquired the real property at a sale conducted pursuant to a power of sale under a deed of trust or a sale pursuant to a court ordered foreclosure or has acquired the real property by a deed in lieu of foreclosure;
(5)  by a fiduciary in the course of the administration of a decedent’s estate, guardianship, conservatorship, or trust;
(6)  from one co-owner to one or more other co-owners;
(7)  made to a spouse or to a person or persons in the lineal line of consanguinity of one or more of the transferors;
(8)  between spouses resulting from a decree of dissolution of marriage or a decree of legal separation or from a property settlement agreement incidental to such a decree;
(9)  to or from any governmental entity;
(10)  of a new residence of not more than one dwelling unit which has not previously been occupied for residential purposes; or
(11)  of real property where the value of any dwelling does not exceed five percent of the value of the property.

Any other sale requires the Seller’s Disclosure Notice.  Folks this is in the Texas Property Code Section 5.008.  You can go read it.

Alice Bruni on 01/03/2017

So if the executor of the estate is an heir then a disclosure is required?

Suzette on 01/03/2017

So if the Administrator is handling the Estate for the Heir then there is no disclosure correct? I think that is why I was questioning the answering. I knew Estates sales did not have to disclose but the actual Heirs selling do.  Yes, I realize the seller disclosure forms do not have to disclose and if the Admin then not worried, if the Heirs I would think they should?

David Davis on 01/03/2017

Suzette: No. Section 5 of the Seller’s Disclosure: “Any death on the Property except for those deaths caused by: natural causes, suicide, or accident unrelated to
the condition of the Property.”

The question asks “except.” So the answer would be NO!

David Davis on 01/03/2017

If they are heirs, yes!  The “trick” part of this question is that the sale is not “by a fiduciary in the course of the administration of a decedent’s estate, guardianship, conservatorship, or trust” as described in 5.008 (e) (5) of the property code.

Simply selling the property by the heirs does NOT meet that criteria!  HUGE misconception!

Suzette on 01/03/2017

What about disclosing suicide on the property do the Heirs have to disclose this and details as well?

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