Things Home Buyers Should Know

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Arkansas – A Van Buren County man on the losing end of a lawsuit warns that if the decision stands all Arkansas home buyers risk being on the losing end with him.

At the center of the disagreement is the disclosure form filled out by most home sellers and how honest their answers have to be.

The seller property disclosure is a standard part of most Arkansas real estate transactions. It tells a buyer about the property such as: settling problems, flooding problems, mold problems, termite problems. Usually the answers are no. But what if “no” was checked and the answer was really “yes?”

Bernard and Ruth Burgess knew the unfinished home they were buying near Bee Branch was a going to be a project. And over the past two years it has come a long way. But they say the home came with an unexpected and unwanted surprise.

(Bernard Burgess, Bee Branch)”We didn’t find this problem until about three weeks after we purchased it.”

The problem was roof damage. And the more they looked, the more damage they found.

Question 21 on the property disclosure form specifically asks: “Has there ever been a problem with the roof?” The corresponding box was checked “no.” The answer at the time of sale was really “yes.”

(Don French, Bee Branch)”After we listed it for real estate then there was notice that there had been a leak. And that was after we had filled out this form.”

French filled out the form in July of 2004. The problem with the roof came up after that but before he sold the home to Burgess in January of 2005. The form was never updated.

(French)”I didn’t know that I was supposed to. The realtor explained that they thought there had been a leak and I explained that I thought I had fixed it. And I thought that was the end of the problem.”

Says a realtor did mention to him that water had somehow entered the home, but he says a problem with the roof was never suggested.

(Gary Burgess)”I inspected this place personally about an hour each time three times before I bought it. I couldn’t find evidence of leaks and I was led to believe it wasn’t leaking from the disclosure form so…”

So Burgess sued. Circuit Judge Charles Clawson ruled that although the sellers had “made a false representation with regard to the repairs to the roof,” and that this was done in “an effort to market the property,” and that the burgesses had “suffered damage as a result,” the claim for damages was dismissed. Why?

Another section of the real estate contract asks a buyer to either accept the property “as is” or pay to have it inspected by a professional. Burgess opted for “as is.”

Judge Clawson ruled that Bernard Burgess “moved at his peril” when he trusted the word of the seller rather than hire a professional inspector.

We asked Karen Crowson, immediate past-president of the Arkansas Realtors Association, if the ruling should shake a homebuyer’s faith in the property disclosure form.

(Karen Crowson, Benton)”This was one judge’s opinion…And I think if you went to ten different judges you’re going to come up with probably ten different opinions…I don’t think this should shake their faith in that at all because most of the time we don’t see this problem happen.”

(Crowson)”The decision basically says that as a buyer anytime there is an “as is” contract, any written seller disclosures are totally meaningless. They’re nothing but a marketing tool…therefore they can be used as a fraudulent tool.”

Burgess is appealing Judge Clawson’s decision.

by Jason Pederson, KATV

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