Selling an Oklahoma Home: What Are My Disclosure Obligations?

If you're planning to sell your Oklahoma home, an important provision of state law requires you to make disclosures about its condition, physical and otherwise. The purpose is to make sure that the homebuyer gets the benefit of the deal, and also that you do not face liability down the line. Exactly what must you disclose to prospective property buyers, and by what means?

Disclosure Laws in Oklahoma for Home Sales

As a seller, you should familiarize yourself with 60 Okla. Stat. § 833 (2003), also known as the Residential Property Condition Disclosure Act. It says that Oklahoma property sellers must deliver to the purchaser either a "disclaimer statement" (indicating that you have never lived on the property and don't know of any defects, therefore won't be making disclosures) or a "property condition disclosure statement," which does list material defects, hazards, and more.

The statute defines a defect as any "condition, malfunction, or problem that would have a materially adverse effect on the monetary value of the property" or that would "impair the health or safety" of its future occupants. 60 Okla. Stat. § 832.

Who Can Choose to Prepare an Oklahoma Disclaimer Statement Instead of Disclosures

Going with the disclaimer statement is only an option for a few homeowners. Again, if you choose to provide a disclaimer statement, you must acknowledge that you have never occupied the property and do not actually know of any defect there.

You might, for example, be eligible to use a disclosure statement if you bought a parcel of land or home purely as an investment or you inherited it, but don't know the property intimately enough to be able to identify any physical or related issues one way or the other.

A disclaimer puts homebuyers on notice that it's their responsibility to conduct a thorough inspection. Oklahoma's Real Estate Commission offers a simple, one-page Disclaimer Statement on its website. Both you and the property buyer must sign the form, acknowledging that you have given it and that the buyer has received it. (And you should each retain a copy!)

Who Must Fill Out an Oklahoma Disclosure Statement

Most sellers of real estate in Oklahoma have lived on the property. In such a case, you will need to fill out a Disclosure Statement (also written by Oklahoma's Real Estate Commission). The disclosure statute is specific about what information must be included on the form, specifically whether the following items are in normal working order, to the extent of the seller's knowledge:

• water and sewer systems
• structural systems, including the roof, walls, floors, foundation and any basement
• plumbing, electrical, heating and air conditioning systems
• the presence of any infestation or damage of wood-destroying organisms (in particular, termites)
• major fire or tornado damage
• whether there is any land fill on the property
• whether there are hazardous or regulated materials and other conditions having an environmental impact, such as asbestos, on the property
• whether the seller is aware of any "prior manufacturing of methamphetamine" there, and
• whether any other defects exist within the seller's knowledge.

What If I'm Unsure About Whether a Defect Exists in My Oklahoma Home?

The Oklahoma disclosure statement is fairly comprehensive, covering most areas that would be of interest to an average buyer.

Not every homeowner knows every inch of the home, however. You might think things are working that are not, or you might simply never use certain features. Fortunately, the disclosure form is clear that you need only disclose information within your own knowledge. Indeed, the bottom of the form says in bold, capitalized letters that the information contained in the form is only based on "seller's CURRENT ACTUAL KNOWLEDGE of the property."

For many of the questions, you have the option of stating that you don't know the answer. This is perfectly acceptable if it's true. Obviously, you should never say that you know something is working if you do not actually know; simply check the box for "Do Not Know If Working."

And if a certain feature isn't included in the house (for example, there is no microwave oven) you can check that last box for "Not Applicable/Not Included."

Note that the Oklahoma disclosure form also includes more bold language directed at the buyer that protects you as the seller: "The declarations and information contained in this disclosure statement are not warranties, express or implied of any kind, and are not a substitute for any inspections or warranties the purchaser may wish to obtain."

In other words, though the law requires you to make these disclosures honestly, the buyer is ultimately responsible for doing investigations, perhaps by paying for a home inspector to issue a report.

Why Should You Be Honest and Open in Making Disclosures About Your Oklahoma Home?

You can face angry buyers and possibly litigation if you fail to disclose a defect about which you had actual knowledge. Imagine, for example, that you had significant problems with the electrical system. You know that the wires are old, and that the backup generator outside is shot. At the moment you sign the disclosure form, everything is mostly working.

But the home inspector could spot the problems, and alert the buyer to the fact that you couldn't have been ignorant of them. Suddenly you're attempting to close a purchase with a buyer who has lost trust in you, and who perhaps wants a major price reduction in light of this "new" information.

Or perhaps after the buyer moves in, the power flickers on and off. The buyer hires an electrical engineer, and realizes it will cost a fortune to upgrade the electrical system, which has clearly been malfunctioning for some time. The buyer sues you for breach of contract and fraud, seeking to cover the costs of repair.

While failing to make honest disclosures might save you some trouble in the short term and result in a quicker sale, there is a potential for greater trouble down the road. The better strategy is to be fully frank and honest in your disclosures, so that both you and the buyer get the benefit of the bargain, and closure once it's done.

Federal Disclosure Requirements

In addition to Oklahoma's state disclosure laws, federal law requires sellers of property built prior to 1978 to disclose the existence of lead-based paint on the property. (42 U.S.C.A. § § 4851-56.)

If your house was built before 1978, you will need to:

• supply prospective buyers with a copy of the Environmental Protection Agency's pamphlet "Protect Your Family From Lead in Your Home"
• attach to the contract (or insert in the contract) a "Lead Warning Statement" and a confirmation that you've complied with all notification requirements; and
• provide a 10-day period for the buyer to conduct a paint inspection or risk assess.

For More Information

If you have more questions about what to disclose to prospective purchasers of your Oklahoma home, talk to your real estate agent or an attorney.