Disclosure in Hawaii Real Estate Transactions
Posted by Alex Cortez on Wednesday, September 11th, 2019 at 5:30pm.
Question: We own a condo in Kakaako and we're interested in selling. We've been told that when we sell, we'll have to disclose everything we know about the property, even if it might kill the deal. Why do we have to 'disclose' if it's not in my best interest?
Disclosure Statement image above by Nick Youngson CC BY-SA 3.0 Alpha Stock Images
Great question, Mark, thank you for asking. To start, please keep in mind that this is not legal advice, this is for informational purposes only and you are highly encouraged to speak to an attorney well-versed with Hawaii real estate. In Hawaii, Hawaii Revised Statute Chapter 508D details the legal responsibility of a Seller to disclosure 'material facts' to the Buyer during the course of due diligence, as agreed upon in writing as applicable to a sale of residential real estate. However, there are circumstances under which such disclosure is not applicable as per 508-3, in summary to a co-owner, immediate family, timeshare, sale by developer, or by court order (which includes bankruptcy, foreclosure, etc.) to name but a few.
"Material fact" is defined as follows: any fact, defect, or condition, past or present, that would be expected to measurably affect the value to a reasonable person of the residential real property being offered for sale. Please keep in mind that such disclosure by the Seller "shall not be construed as a substitute for any expert inspection, professional advice, or warranty that the buyer may wish to obtain" as per 508D-1. As a general rule of thumb (NOT legal advice), a Seller is best served by disclosing all pertinent details and allowing the Buyer the option to accept the property with such disclosures known. There are some very reputable Hawaii real estate attorneys throughout the islands, let us know if you would like recommendations and we'll be sure to send.
Disclosure Statement image above by Nick Youngson CC BY-SA 3.0 Alpha Stock Images
Great question, Mark, thank you for asking. To start, please keep in mind that this is not legal advice, this is for informational purposes only and you are highly encouraged to speak to an attorney well-versed with Hawaii real estate. In Hawaii, Hawaii Revised Statute Chapter 508D details the legal responsibility of a Seller to disclosure 'material facts' to the Buyer during the course of due diligence, as agreed upon in writing as applicable to a sale of residential real estate. However, there are circumstances under which such disclosure is not applicable as per 508-3, in summary to a co-owner, immediate family, timeshare, sale by developer, or by court order (which includes bankruptcy, foreclosure, etc.) to name but a few.
"Material fact" is defined as follows: any fact, defect, or condition, past or present, that would be expected to measurably affect the value to a reasonable person of the residential real property being offered for sale. Please keep in mind that such disclosure by the Seller "shall not be construed as a substitute for any expert inspection, professional advice, or warranty that the buyer may wish to obtain" as per 508D-1. As a general rule of thumb (NOT legal advice), a Seller is best served by disclosing all pertinent details and allowing the Buyer the option to accept the property with such disclosures known. There are some very reputable Hawaii real estate attorneys throughout the islands, let us know if you would like recommendations and we'll be sure to send.
Specializing in Makena and Wailea real estate, Alex Cortez is fully dedicated to representing his clients ethically and diligently. Contact him at 808.385.5034 or Alex@MauiRealEstateSearch.com for more information.