Proper disclosure is one of the most critical tasks that a home seller must perform during the close of escrow process when selling a home. Disclosure involves letting the interested buyer know up front any and all issues that may be important in determining the consideration that a buyer is willing to offer for the property.
Take a look at the video below and keep in mind the question, ”
Should a palm tree farm be disclosed?”
In Arizona, like in other real estate markets, the single most important document for capturing disclosures is the Seller Property Disclosure Statement, or SPDS. This 6-page document is a checklist for home sellers to go through to identify items worthwhile to call out for the buyer. The key guideline for sellers filling this out is the following (my add is second sentence), “When in doubt, disclose! Disclose now, not later!” It is more beneficial to call out everything now than not call out something that could be a legal issue for the seller later.
The Seller Property Disclosure Statement covers numerous items but the simply, it covers the home itself, the yard around the home, and factors around the area that might be of concern to an interested buyer. The SPDS calls out:
- Occupied or vacant status of the property as well as legal title status and any encumbrances
- Utility companies or city services for services to the property such as electricity, gas, water, sewer, and trash
- Awareness of any liens on the property such as lender liens, property tax liens, mechanics liens, and the like
- HOA association, if there is one, and related fees
- Foreign Investment Real Property Tax Act (FIRPTA) withholding (Seller is a foreign national)
- Insurance claims on the property. Sellers also will be required to provide a Comprehensive Loss Underwriting Exchange or CLUE report during a transaction unless the contrary is indicated in the contract. Home sellers may provide a letter from their insurance provider attesting to any claims on the property over the covered period with that provider.
- Structural issues with the property such as roof leafs, significant wall cracks or bowed walls and doorways, unusual foundation settling or cracking, etc.
- History of any wood infestation and damage by termites and related insects.
- Presence of pests such as lizards, spiders, and especially scorpions. Excessive pigeons on the property roof would be a disclosed by the prudent seller.
- Plumbing material used and any issues with the plumbing in and out of the home. This is an area where calling out major renovation work is advised. Plumbing covers the water heater, water pressure, type of plumbing in the home, yard watering systems, etc.
- Electrical considerations and any issues and repairs. This would include any additional electrical systems such as a security system in the home.
- Environmental issues such as the type of soils in the area, presence of dumps or airports or facilities that may be of concern, whether there are any known hazardous materials or gases in the property, and whether the property is in a Superfund siteor in a flood zone.
- It also calls out more detail on the sewer circumstances for the property.
The Seller Property Disclosure Statement does not cover everything as there are several items that do not have to be disclosed legally, such as if a death occurred at the property, if someone living at the property is diagnosed with HIV, and the presence of any sex offender in the neighborhood or surrounding area. The latter poses a dilemma for the seller and buyer and so buyers should be sure to check the Arizona sex offender database separately.
Coming back to the question posed above, why should a palm tree farm be something to call out potentially in the SPDS? The answer is that the presence of many palms on a property lot alone doesn’t warrant disclosure.
However, if you notice in the video, the palms have clearly not been trimmed in a very long time. As a result, the frawns have fallen on each other and represent a possible ideal environment for scorpions to live. In this particular case, it has been documented that the neighborhoods nearby have a significant scorpion population. There is some belief that the palm trees are havens for these pests and have contributed to the problem being experienced by some homeowners in those neighborhoods.
So, if I were consulting a home seller in the community, I would recommend that the seller disclose the presence of the palm tree farm (the closer their home is to it, the greater emphasis it has), especially given that the topic was presented in the local newspaper earlier this year. Now, I recommend this because the evidence is compelling. If there were no identified issues with scorpions in the area, then the palm tree farm might only be disclosed as it may represent a commercial enterprise and commercially zoned parcel next to owner’s home.
Coming back to the specific disclosure here, I would also recommend that they call out how many scorpions in the home they have seen personally over the last 12-24 months (inside and outside). Unfortunately, the seller may lose some potential buyers due to this disclosure. However, there will be a buyer out there who loves the home and buy it and isn’t concerned for any level of scorpion activity.
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Really nice post. I agree that something like this needs to be disclosed, I never knew but it makes sense that scorpians like this type of environment. Seems like if there is ever a question on if something should be disclosed the seller should always disclose. Nothing wrong with telling a buyer something that may not end up being a concern. Liked the video in your post as well.