Purchasing a home comes with risks, but buyers have plenty of resources to help them gather information about a property. A third-party home inspector will provide a report of the home’s interior and exterior features during escrow, and buyers are entitled to additional inspections performed by specialists. Buyers using real estate licensees also may have access to information regarding material defects or other concerns about the property. There is an obligation to disclose these matters, per their fiduciary obligations owed under Arizona law.
There is certain information real estate licensees must disclose to sellers and buyers. Here is a quick guide to help you better understand a real estate licensee’s disclosure obligation.
Duty of Disclosure, Explained
All Arizona real estate licensees have a fiduciary duty to their clients and must act in the clients’ best interests. One of those duties is the “duty of disclosure,” which is the obligation to provide all the necessary information about a property to potential buyers. This is intended to save the buyers from purchasing a home with lasting damage or other costly problems.
Arizona Department of Real Estate Lists Broker’s Duties
The Arizona Department of Real Estate Commissioner has enacted Rules to address a licensee’s duties. R4-28-1101 requires a buyer’s licensee to act promoting the client’s interests and disclose any material defects on the property.
The duty to disclose material defects makes transactions difficult to navigate because there is no hard-and-fast definition of “material.” Existing case law precedent defines “material” as anything a reasonable buyer would attach importance to. Buyers and sellers place different levels of importance on characteristics of a property, so there is sometimes as to what information should be disclosed. Further, a licensee should disclose, in general, responsive information to a matter the buyer has made an inquiry into, even if the seller has not deemed it material.
Arizona Property Disclosures
The standard Arizona Association of Realtors Purchase Contract requires the seller to deliver to the buyer a completed Seller Property Disclosure form shortly after Contract acceptance. This form is designed to facilitate the Seller’s underlying seller disclosure obligations that exist under Arizona law—namely, to disclose all known, material, latent defects associated with the Property.
If a seller or real estate licensee fails to disclose information required to be disclosed under Arizona law, the buyer can sue for legal damages resulting from the non-disclosure.
Find an Experienced Arizona Real Estate Attorney
MacQueen & Gottlieb has significant experience with real estate disclosure laws in Arizona. Our firm can help you evaluate any defects or building code violations found after the purchase of a home. Contact us today at 602-562-7218 to schedule an initial consultation or make an appointment online.