San Antonio investment properties offer home flippers an opportunity to turn an otherwise dilapidated house into a livable – and often luxurious – space. But when flipping a home in San Antonio, it's important to be knowledgeable of required disclosures, as failure to disclose certain facts may result in litigation or fraud charges. Learn which disclosures are required by the state of Texas to avoid unexpected discord after the home is sold.
The Texas Property Code Section 5.008 (pdf) describes mandates and exceptions as they pertain to a seller's disclosure notice. After flipping a home in San Antonio, review the required disclosures to ensure buyers are given the most accurate information available.
Death on Premises
While the state of Texas doesn't require sellers to inform buyers of death in the home due to natural causes, suicide, or injuries unrelated to the property, history a property-related death is a required disclosure as the same hazards may be present to new owners. Texas' property code does not specifically list homicide among the factors that require disclosure; however, smart sellers often opt to divulge this information as it can affect a buyer's decision to purchase the property. Additionally, a homicide may be cause for future law enforcement investigation of the property, which any homeowner would want to know.
Most investors who flip homes in San Antonio don't leave unfinished repairs for buyers to manage; but, if any repairs are needed upon selling the property, it's the seller's responsibility to list any and all needed repairs at the time of disclosure. After listing interior and exterior items present on the property, sellers are required to disclose whether any of these items are in need of repair, including appliances, major utility systems, fixtures, exterior structures, entryways, and surfaces. Failure to disclose which items are in need of repair can lead to legal repercussions for the seller.
Whether or not a seller is aware of the cause, water damage must be reported to a prospective buyer. San Antonio investment properties are subject to the area's changing weather conditions, which include humidity, heavy rainfall, and tropical storms or hurricanes. To make matters worse, many homes purchased pre-flip are teetering on the brink of foreclosure, during which property maintenance and care often lapse. Because water damage can destroy property, compromise building materials, and produce health risks due to the presence of mold, it's extremely important for sellers to inform buyers of its presence.
Defined as an annoyance caused by conditions off-property, residential nuisances are typically environmental and may include noise or odors. After flipping a home in San Antonio, sellers are advised to be transparent about existing nuisances in the area, as these could affect a buyer's decision to purchase the property. It's important to note that sellers must disclose nuisances they are aware of, but doesn't mean the seller has to personally experience the nuisance. Other parties reporting the nuisance, like neighbors or an inspector, are considered valid sources of information when it comes to disclosure. An unreported nuisance that negatively affects a buyer's enjoyment of the property may result in litigation for the seller.
Present or Potential Hazards
Situated approximately 150 miles from the Gulf of Mexico, San Antonio investment properties are at risk of being hit by heavy thunderstorms and tropical storm-force winds, particularly during hurricane season. Additionally, flipped properties in this section of Texas may have a history of lead-based paint use or be in proximity to hazardous materials, which both require disclosure by the seller. Other potential hazards include the presence of a single, blockable main drain, asbestos particles, radon gas, and flooding. To minimize risk, sellers should always be as specific as possible when listing hazard disclosures.
Once flipped, many San Antonio investment properties have more amenities than ever before. However, the state of Texas requires sellers to itemize a property's contents prior to selling. Any items that are missing, even if not promised to the buyer, must be indicated as such on the seller's disclosure of property condition form. Thought not necessary for safe habitation of a property, items like TV antennae, outdoor grills, and pools or spas must be included on a seller's list of missing items. Essential features, such as a water heater, septic system, or range, must be identified as missing if not present at the time of contract.
Home Owner's Association Status
When properties are governed by a home owner's association, there are multiple implications for the buyer. First, the buyer must agree with -- and vow to uphold -- the HOA's terms and conditions for property management and development. Second, home owners are responsible for fees and assessments imposed by the association. This alone can be the turning point for a buyer who later cancels their agreement to buy. Avoid this situation by both disclosing the presence of a home owner's association and providing buyers with at least the last year of meeting minutes, latest fees, and list of restrictions.
Though not obvious to many sellers, miscellaneous disclosures should be listed as a precaution. Non-threatening risks, such as a home's location in a historic district, must also be disclosed, as this fact can affect a buyer's ability to improve upon a property. Specifically in Texas, sellers are also required to report the presence of pest infestation, including termites and carpenter ants, as the home's structure and value may be affected. Even if currently under control, the infestation's existence and treatment history must be documented by the seller during disclosure.
When in Doubt, Disclose
Though Texas' property laws differ somewhat from other states, it can be beneficial to disclose information not required by law simply to ensure the buyer is 100% satisfied with their home purchase. For example, you may not be required to disclose on-premises deaths from natural causes or suicide, but may want to anyway in an effort to achieve transparency and build trust with buyers.