The disclosure form is an important document in the home selling or buying process.
As a seller, it’s your responsibility to provide a duly accomplished form to your prospective buyer. It is also a protective measure in case a buyer attempts to sue based on claims that the home or property has serious damage or issues.
For buyers, the disclosure statement provides crucial information that can determine whether a home is worth buying or not. In Alaska, buyers need to see a disclosure statement before they make an offer. So if you still receive serious interest from a buyer after they see issues in your disclosure form, it’s a good sign that the buyer is motivated to move forward with a purchase.
Seller disclosure statements require real estate property sellers to describe the type, features, and components of the property, as well as the condition of each feature. Disclosure statements typically cover:
- Structural components such as the foundation, load-bearing walls, and roofing
- Essential systems like electrical wiring, plumbing, heating, and sewage
- Any appliances included in the sale
- Level of exposure to natural weather events like storms, flooding, and earthquakes
- Environmental hazards such as asbestos, lead, radon, mold, or any contamination resulting from the property’s previous use
- Previous remodeling or additional structures built on the property
- Any presence or previous problems with pest infestation on the property
- Zoning restrictions
For any property built before 1978, there must also be proper disclosure regarding the use of lead-based paint anywhere on the property.
Sellers must also disclose other factors that can affect the value of the property. These include proximity to noisy business or industrial establishments, a local airport, or any loud neighbors and pets near the home.
Alaska-specific disclosure requirements
In Alaska, the typical seller disclosure statement is a nine-page form that requires the general disclosures listed above, along with area-specific concerns. For example, because of the location’s extreme cold temperatures, disclosures must be made regarding “freeze-ups” – referring to cases of freezing water, plumbing, or sewage lines and heating system malfunctions.
A property seller must also disclose any problems or effects of permafrost (any ground surface that is frozen for at least two years) on soil stability. When permafrost thaws, the softened soil left behind can cause serious slippage, sliding, and heaving that can damage any structures built on it. Alaska state law also requires disclosures regarding any suicides or homicides that took place on the property within one year of showing to prospective buyers.
Penalties for failure to disclose
Property sellers are required to complete disclosure statements to the best of their knowledge. This means you can indicate that you are not aware of certain issues, especially those involving parts of the property that are not visible to the naked eye.
It may be in the seller’s best interests to have the property inspected to identify and declare all present and potential issues. This is not required by law in Alaska, but because the disclosure statement is a means of protection from potential legal problems, a professional inspection can be a worthwhile step.
In Alaska, deliberately failing to provide buyers with a comprehensive disclosure statement can subject the seller to three times the actual damages suffered by the buyer. The court may also rule that the seller must cover the buyer’s attorney fees and court costs.