Seller’s disclosure

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Seller’s disclosure

I’m buying a property in Hawaii and I just found out that the next door property is a halfway home. The seller previously did not disclose it but it is a major concern for me. Is it considered as a material fact that seller is required to disclose?

Asked on January 4, 2018 under Real Estate Law, Hawaii

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

No, it is not a material fact that the seller must disclose. The law requires the seller to only disclose facts about his/her property: e.g flooding, sewage vs septic, source of heat and water, any buried oil tanks, etc. They do not need to disclose anything off--even adjacent to--their property.
Furthermore, getting out of a contract (or getting compensation) due to a non-disclosure is based on a finding that fraud was committed. Even when there is a duty to disclose, it is only fraud if the buyer "reasonably relied" on the seller's nondisclosure. If the buyer could find something out for him/herself, then it is not reasonable to rely on the seller: the buyer is expected to do some due diligence. For example, take issues like school district or local crime rates: buyers can look these things up for themselves. Similarly, it is public information that a nearby property is a halfway house: it can be looked up and found out. Since this is public information and not some hidden defect that you cannot discover, even if the seller had an obligation to disclose it, it would not be fraud because you could not passively rely on what the seller told you, but are expected to research your own neighbors and neighborhood, if concerned about them.


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