Let’s say the buyer in the above scenario chose to terminate the contract. What obligations does the seller have to subsequent buyers to disclose information in the prior inspection report the seller disagrees with?

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  • Let’s say the buyer in the above scenario chose to terminate the contract. What obligations does the seller have to subsequent buyers to disclose information in the prior inspection report the seller disagrees with?

A broker or seller who receives an inspection report is charged with knowledge of the information in the report. This is true even if the broker or seller does not open the report or disagrees with the information contained in the report. If an inspection report reveals material defects, the seller and the broker are obliged to disclose those defects to subsequent potential buyers. The seller and broker may choose to disclose the defects orally, but that may be imprudent since no record of the disclosure would exist; summarize the defects in some written communication to the subsequent purchaser, but that may create a risk that some important information may be edited out. The seller and broker should provide a copy of the report to the subsequent potential purchaser along with the seller’s disclosure notice, thereby providing all of the information the seller and broker have with regard to any know defects. If the seller strongly believes the information in the inspection report is incorrect, the seller could have another inspection performed. If this is done, the seller should provide both reports to subsequent buyers. The TAR Seller’s Disclosure Notice (TAR 1406) asks the seller to identify and attach copies of previous inspection reports. TAR’s notice cautions the buyer against relying on previous reports as a reflection of the current condition of property and suggests that the buyer employ an inspector of the buyer’s choice to inspect the property.

Source: TAR

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