As with every state, Maryland has disclosure laws that you must abide by when you sell your home. When you are ready to list your home, you naturally make it look as good as possible. You might even do some upgrades or some extra landscaping. However, if you don’t repair certain defects, you do have to disclose them. You cannot hide problems such as a leaking pipe or a problem with the electrical system.
Maryland code dictates what you must disclose. Your real estate agent should give you a copy of the form when you sign the listing agreement. You need to complete the form and give it back to your agent. Unlike most other states, you have a choice – you can disclose known defects, or you can use a disclaimer as to the home’s condition. However, you cannot use both. If you choose to use the disclaimer as to the home’s condition, you don’t disclose anything, but leave the problems up to a prospective buyer’s imagination. The only problem with this avenue is that your house might be harder to sell.
What Does the Disclaimer Cover?
If you use the disclaimer, you are selling your house “as is.” The buyer assumes liability for any defects. However, you still have to disclose latent defects if they might not show up in an inspection, and you know about them. Those defects must be a safety threat or health threat to the buyer.
However, you might not know of every defect in the house, even if that defect is a safety hazard or health hazard. Actual knowledge means that you know something is defective. For example, if you know a pipe is broken in the wall and don’t disclose it, the buyer could hold you liable. If you do not know the pipe in the wall is broken, then the buyer cannot hold you liable.
Using the disclaimer could scare your buyer into hiring inspectors to have a closer look at your home. If the inspectors find something major, the buyer could find a way out of the contract, whereas if you disclosed the issue, you could negotiate on repairs for the issue.
What You Must Disclose
If you choose to disclose the problems, you must disclose certain defects, including:
Problems with the plumbing system;
Problems with the septic/sewer system;
Issues with the structure of the house;
Heating and air conditioning issues;
Whether the house has termites or other wood-destroying insects;
If there are hazardous materials on the property or in the house; and
All other material defects that you know about.
The disclosure form also allows you to make comments. You can use the comments to explain issues, especially when ‘yes’ or ‘no’ answer isn’t enough. Maryland’s disclosure form also asks you to disclose non-defect issues, such as whether you are located in a flood zone, if you live in a deed-restricted neighborhood or you live in a historic district.