Boulder City Magazine is a monthly publication full of information about Boulder City and Southern Nevada. Boulder City Magazine features the Boulder City Home Guide, a real estate guide to Boulder City and Southern Nevada.

Lawyer's Edge
by Rodney S. Woodbury, Esq.
Woodbury, Morris & Brown

To Disclose Or Not To Disclose

Under Chapter 113 of the Nevada Revised Statutes (“NRS”), most sellers of residential property in Nevada are required to disclose defects to buyers at least 10 days prior to conveyance of the property.

To facilitate this requirement, the Nevada Real Estate Division publishes a check-the-box Seller’s Real Property Disclosure Form (the “SRPD Form”). The SRPD Form lists several common residential amenities and conditions and prompts the seller to check a “YES” box, “NO” box, or “N/A” (not applicable) box to indicate whether the seller is aware of any applicable defects.

Not surprisingly, residential sellers often struggle over how much to disclose. The safest approach might be to disclose everything, even the smallest of problems. That way, the ultimate buyer is far less likely to later complain that “I didn’t know” or “you didn’t tell me” or to file a lawsuit based on some kind of misrepresentation or fraudulent concealment theory. On the other hand, every home has periodic maintenance and repair issues, so adopting such an approach might lead to a mile-long list of “defects.” Moreover, the stigma associated with the term “defect” often has such a chilling effect that it can significantly drive down sales prices or even prevent sales from occurring altogether.

Until recently, there has been little guidance as to how much disclosure NRS 113 requires. However, a recent decision by the Nevada Supreme Court affirmed that a residential seller has a duty to disclose only those defects of which the seller is aware. The Court said that “aware” means “marked by realization, perception, or knowledge” and opined that it is impossible in any case for a seller to disclose conditions of which he or she has no realization, perception, or knowledge. In addition, the Court held that prior water damage which had been properly repaired no longer constituted a defect (i.e., a condition that materially and adversely affects the value or use of the property). Accordingly, the seller did not have a duty to disclose either the repaired water damage of which she was aware or the mold of which she was not aware.

The Supreme Court’s decision should give sellers some comfort that they don’t have to disclose everything. When in doubt, consult a qualified attorney.

Rod Woodbury can be reached at rwoodbury@wmb-law.net.



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