It can feel like there’s a mountain of paperwork in buying or selling a new home. But one document that shouldn’t go unnoticed is a Seller Property Disclosure Statement, often referred to as the SPDS, or ‘spuds’.
In this article we share exactly what an SPDS is and why it’s so important in real estate.
What is a Seller Property Disclosure Statement (SPDS)?
The SPDS is a document used when buying or selling a home which is designed to protect both parties. It gives the seller the opportunity to disclose insight into the condition of the property, providing a lot more information for the buyer to consider during the home inspection period. This includes any known defects or damages that have occurred during the seller’s time in the home.
Sellers are legally obligated by law to disclose all known material facts about a property to the buyer. While a Seller Property Disclosure Statement is not required, it is extremely advised to do so.
To make matters easier, the SPDS is divided into six sections:
Ownership and General Property
Here the seller must provide information about the property including the address and occupancy and ownership details.
Building and Safety Information
This section details the physical aspects of the property which must include any past or present issues as well as improvements that have been made.
Utility Information
Types of utilities offered such as gas and electricity, and which suppliers currently provide them.
Environmental Information
This section covers environmental hazards, issues related to soil settlement, erosion, drainage and noise, and odors, or nuisances in the surrounding areas.
Sewer and Wastewater
Information regarding the type of treatment available for sewer and wastewater.
Other Conditions and Explanations
Here the seller can disclose any other miscellaneous information not covered in the previous sections that may affect the value of the property or the buyer’s decision in purchasing.
The SPDS must be delivered within five days of contract acceptance by the seller. From here, the buyer has five days to cancel the contract and receive a full refund.
Why SPDS is important
A Seller Property Disclosure Statement not only streamlines the process of buying and selling a property (avoiding back and forth questioning in regards to the property’s condition). It also protects the seller from future liability.
Failure to disclose accurate, up to date information can account for unavoidable real estate lawsuits. Therefore the completion of a SPDS is highly encouraged.
Should you share your SPDS with your home inspector?
Ultimately, yes. While sellers are responsible for disclosing all known property facts within a Seller Property Disclosure Statement, buyers are the party responsible for verifying the information. It’s therefore crucial to share this document with your home inspector for further investigation, particularly if there are any areas of concern.
For example, if mold is reported within the property, you will want the inspector to check for any additional damage to walls or flooring.
Looking for real estate legal support?
Based in Arizona, the Dessaules Law Group has considerable experience in all aspects of real estate law, representing landlords and tenants, buyers and sellers, borrowers and lenders, and homeowners.
Contact our attorneys today to learn more about our real estate services.