Lawyer Monthly Magazine - October 2019 Edition

To Disclose or To Not Disclose? That Is the Real Estate’s Most Important Question Not all real estate is a good investment, especially if you invest in a property that only presented a plethora of issues from the moment you turned the key in the front door. Speaking to Steven Tal Young, he reveals the importance of nondisclosures in real estate and how the sellers have an obligation to state issues and defects with the property prior to a transaction being finalized. Why has there been a sudden upsurge in non-disclosures in real estate? The 2008 economic downturn in the United States had a major impact on the housing market. While new construction in many states all but “flatlined”, the secondary market experienced a significant downturn as well. Unfortunately, pre 2008 mortgagees found themselves “house poor” and underwater with respect to loan to equity post 2008. While the market has improved nationwide, this dilemma resulted in low loan to equity ratios. Many prospective sellers were prompted to postpone marketing efforts in an attempt to capture losses occasioned by the downturn. Moreover, the general unpredictability in the market has resulted in a more aggressive marketing strategy. Virtually all states have experienced the effects of this downturn and have struggled to recoup losses. This, coupled with historically delayed economic growth, makes New Mexico a breeding ground for nefarious real estate marketing. Why is disclosure of material issues in connection with marketing efforts of real property important? Most states require sellers of real estate to disclose known defects and issues with real property when marketing real estate for sale and prior to engaging in a transaction for sale of the real estate. The key is that the buyer should be placed on equal footing with the seller. This is typically conveyed by way of a uniform seller’s disclosure statement. In New Mexico, the seller is required to accurately and completely convey this information to prospective purchasers pursuant to a New Mexico Uniform Residential Disclosure Statement. Key points: • When must the disclosure occur? Under state law, the disclosure should be given to the buyer before the execution of a purchase contract. • What must be included in the disclosure? The disclosure is intended to convey to the prospective purchaser the condition of the property as known. In addition to requiring standard assurances about material aspects and potential defects in the property’s condition, New Mexico requires that home sellers obtain property tax information from the county assessor and give that information to the buyer. This is typically done through the use of a real estate listing broker. Super Lawyers By Steven Tal Young, Tal Young, P. C. 60 WWW.LAWYER-MONTHLY.COM | OCT 2019 Contact Steven Tal Young Managing Principal 8650 Alameda Blvd. NE Suite 206E Albuquerque, New Mexico 87122 Phone: 505-247-0007 www.talyoung.com