Drug-dealing neighbors warrant disclosure

DEAR BARRY: We just listed our home for sale because crime in the neighborhood has become intolerable. The neighbors next door have been dealing drugs and the police have raided their house twice in the past year. We were planning to disclose these circumstances to buyers, but our agent says this kind of disclosure may not be a legal requirement. She's going to check this out with her broker. What are your thoughts on this matter? --Gerry

DEAR GERRY: Your agent has a distorted perspective regarding real estate disclosure. She is apparently asking herself, "What do I legally have to disclose?" rather than simply disclosing every known fact that would be of concern to buyers.

Living next door to people who are at odds with the law affects the value and desirability of your property, not to mention the safety and security of children and other residents on your street. Whether the law specifically mandates such conditions for disclosure is irrelevant.

As a licensed professional, your agent should realize that circumstances such as criminal activity in the neighborhood could be decisive to prospective buyers. Failure to disclose such information could motivate some people to file a lawsuit against the agent, the broker and you. In today's litigious environment, failure to disclose every questionable aspect of a property is plainly foolish. Besides that, it is simply dishonest. Some people just don't get it till it's too late.

DEAR BARRY: We just purchased a 40-year-old condo. After moving in, we noticed that rusty water comes from some of the faucets when they are first turned on. The plumber from the warranty company said the problem is deteriorated galvanized steel pipes. He estimated $7,500 to repipe the unit.

Our home inspector didn't disclose this problem, but the sellers could have run the water before the inspection, flushing the rusty water from the lines. Who knows? It just seems that the sellers must have been aware of this condition. Shouldn't they have disclosed it? --Becky

DEAR BECKY: Sellers are required to disclose whatever property defects they are aware of, and it seems reasonable to expect that the sellers knew of this condition. Rust-colored water at faucets is an observable and unusual defect that would arouse the interest and concern of most homeowners. Therefore, failure to divulge such a condition to buyers would be a disclosure violation.

You are now faced with an expense that should have been resolved by negotiation or by cancellation of the sale. The first step in addressing this issue is to notify the sellers and agents regarding your concerns. If the sellers are unwilling to accept responsibility for the repairs, you can seek the advice of an attorney.

It would also be wise to obtain two more bids from licensed plumbing contractors. The costs for such repairs can vary widely. It's entirely possible that the $7,500 bid is too high. It is also possible that only some portions of the water piping warrant replacement. Clarification in this regard would be beneficial to everyone concerned.

To write to Barry Stone, please visit him on the Web at www.housedetective.com.

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