Due Diligence and Seller’s Disclosures- “Buyer Beware!”

Utah, like most states, is a Caveat Emptor state, in other words—“Buyer Beware!”. This means that it is generally the buyer’s obligation to sufficiently inspect the home, property and systems before buying. The Seller does not owe the Buyer any warranty or promise as to the condition of the residential real estate upon sale.

However, the Utah Real Estate Purchase Contract (“REPC”) does require the Seller to provide Seller’s Disclosures to the Buyer. The Seller’s Disclosure form contains various categories which require the Seller to provide information, to the best of their knowledge, as to any known issues, problems or defects that may impair or impact the value or use of the property. The Buyers can then hire their own inspectors to further investigate and review the presented issues, and then decide what steps to take next. As the Seller’s Disclosure is provided during the Buyer’s due diligence period, the due diligence and inspection conditions are applied, which allow the parties to negotiate the contract to account for or ignore these issues; the buyer may even cancel the REPC as condition deadlines allow.

It is important to remember that the Seller is obligated to disclose only issues or potential problems that he or she knows about. The Seller is not required to hire professionals to inspect or conduct a thorough investigation prior to marketing property for sale. However, it is imperative that the Seller disclose things that he or she is, in fact, aware of. If the Seller fails to disclose any item that is known, he or she faces potential liability to the Buyer for damages due to the failure to disclose. As a result, it is important that Sellers review the Seller’s Disclosure carefully and ensure that the answers are truthful to the best of the Seller’s knowledge.

If you are a Seller with questions about what needs to be disclosed, or a Buyer concerned that the seller may not have fully disclosed items, please contact us at 801-365-1030.