Seller’s disclosure forms aren’t required in Alabama.
Real estate laws vary from state to state. Alabama is one of the few states that have a “caveat emptor” rule. Caveat emptor is Latin and translates to “buyer beware.” According to RocketMortgage.com, “The short list of states that lean toward caveat emptor is Alabama, Arkansas, Georgia, North Dakota, Virginia and Wyoming.
Caveat emptor means that a house seller need not inform the buyer of negative issues or risks pertaining to the house or property, with only a few exceptions. Most other states require a house seller to fill out a standard “seller’s disclosure” form that notifies the seller of problems or flaws with the property. Seller’s disclosure forms protect the buyer, but in Birmingham, the potential buyer must be proactive and cautious and understand what questions to ask the seller.
In Birmingham, it is the buyer’s responsibility to ask lots of questions, record the answers, and have the property inspected by professionals. Sellers do not have to disclose any flaws. But if a prospective buyer asks questions, the house seller must answer them honestly.
According to Nolo.com, a highly regarded legal information website, “In a major Alabama case ... the buyer asked about water incursions or damage, the seller said there was none, and the buyer was unhappy to discover later that the house was full of rot and evidence of leakage." In this 2002 Supreme Court of Alabama case, the Court decided that although the seller was dishonest when asked directly about water issues, the buyers had signed the sales contract that stated the house was sold “as is” and ruled in favor of the defendants.”
Caveat emptor: Exceptions to real estate disclosure in Alabama
Aside from sellers having to give honest answers to buyer’s questions, there are two other exceptions to the caveat emptor law in Alabama. One involves fiduciary relationships. A fiduciary, according to Consumerfinance.gov, is “someone who manages money or property for someone else. When you’re named a fiduciary and accept the role, you must – by law – manage the person’s money and property for their benefit, not yours.” Therefore, sellers are expected to give honest and complete information about the property’s condition.
The other exception is a lead-based paint real estate disclosure. It’s a federal law that sellers must provide information about lead-based paint risks, even in Alabama.
Although material defects in real estate aren’t required in a seller’s disclosure in Birmingham, it’s highly advised that a buyer insist on a property disclosure form of their own making, signed by the seller and including a checklist of all the buyer’s questions and seller’s answers. This form should include queries about water, sewer/septic, structural details, fixtures, appliances, etc.
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