Do You Have To Disclose Water Damage When Selling A House?

Suppose you can’t wait to sell your home and start over in a new place, or maybe you have to sell it and move immediately because of a work transfer or something more tragic, like a death in the family. As the seller, you may be tempted to exaggerate or remove facts from the seller’s disclosure to speed up the sales process. You’ve put in many years at your current address, and it’s holding up just fine.

Or perhaps during the 12 years you’ve owned your home, you’ve given it a lot of TLC through maintenance and repairs. You are now thinking about putting it on the market, but you have been told that you are required to declare any flaws in the house. Do you need to reveal even the flaws you’ve fixed or had someone else fix, such as water damage?

Indeed, there is great ambiguity here. You need to walk a fine line between being honest about issues a buyer could have in the future and discouraging them from making an offer altogether. If you choose not to provide critical information to potential buyers, however, you will have a far more difficult time selling a house with previous water damage.

It’s The Right Thing To Do

While it’s understandable that you’d want to unload your home, you shouldn’t do so at the expense of the buyer who doesn’t know about the wood rot, property damage, and mold that might potentially be lurking in the basement, attic space, or walls. Consider the possible outcomes of your choice. 

You are responsible for informing the buyer about any major structural problems caused by water, mold, or termite damage. 

Water damage is typically a precursor to mold growth. Damage to the house and residents’ health risks are possible if mold problems are not addressed.

Buyers are more likely to seek repairs before closing if they discover water damage. Even if the seller can’t fix the problem themselves, the home buyers should be aware of them before moving in.

Most states require disclosing water damage when selling a house. It is preferable to tell the truth from the start than expose the deception after the home inspection. Repairing a water leak before closing will not likely deter a sensible buyer from buying a house with previous water damage. However, if a buyer discovers a failure to disclose water damage, such as a water leak found after closing, they have the legal right to back out of the purchase agreement and possibly get their deposit back.

It’s Your Legal Responsibility

Speaking of legal rights. Declaring any damage to the house that might be structural is not only the right thing to do from a moral standpoint, but it is also your obligation under disclosure laws. Water is absolutely structural.

You may face legal action if the water damage was already present and you failed to disclose it. In addition, you can encounter a lawsuit down the road if the standards of the renovations you performed fall short of property codes.

Homeowners must fill out a legal form called a seller’s disclosure form or a real estate disclosure form, in which they respond to a series of questions concerning the property’s condition. As soon as you sign a listing agreement with a real estate agent, they should provide instructions on completing a seller’s disclosure.

What to include in the seller’s disclosure? Essential elements to mention are water damage, HVAC, skylights, the house’s foundation, and the pool, if any. 

Real estate disclosure requirements will vary by state. Potential buyers may inquire as to whether or not the property is located in a flood zone, for instance, to determine whether it is more vulnerable to water damage.

If you are hauled to court for property damage fraud, it is expensive to defend yourself legally. If you are prepared to admit guilt, a simple demand letter from the buyer may be all it takes to get you to cough over the penalty for lying on the seller’s disclosure.

The first step should be mediation when disagreements arise, such as if the seller didn’t disclose water damage. The buyer may file a lawsuit only if both parties have exhausted all other available means of resolving the dispute via mediation.

Of course, if the seller knew nothing of the water damage, they cannot be required to disclose a concern that they are ignorant of, according to the law. For further legal advice, consult a real estate attorney.

It’s Best To Be Transparent

When two total strangers get together in selling and buying a home, a trusting relationship is forged between them. Since this is such a high-stakes real estate transaction for both buyer and seller, the seller must take extra care to ensure that the buyer can put their faith in them.

It’s preferable to just come clean about the house’s flaws and issues. Don’t let their home inspector notice the damage and draw attention to it; it would betray the buyer’s confidence. They may wonder, “what else aren’t they telling me?” as a result.

Perhaps a massive rainfall flooded your basement completely. You wasted no time repairing and evaluating it, and your contractor concluded it was a one-off occurrence. It would be beneficial for the home seller to disclose this background information and supporting papers to ensure that the buyer has a full grasp of the condition of the property and what to keep an eye out for.

Neither the entire cost of basement leaks after buying the house nor any potentially exorbitant legal expenses will be your responsibility if you exhibit this transparency— this and a pre-inspection and an accurate TX disclosure statement. 


You can make a ton of different damage disclosures. This is why some jurisdictions use the buyer Beware or Caveat Emptor rule rather than requiring a uniform disclosure statement. The buyer takes full responsibility for addressing any concerns with the property. 

Is the location of your property put in the path of potential natural calamities, for example, and should that information be shared? Are you dealing with a bug invasion inside your house? 

Your property may be in a deed-restricted neighborhood, or you possibly installed a new water heater. If so, the prospective buyer has to know about it. In cases when a seller knows of facts about their home that may make a potential buyer unhappy, they may choose to reveal it even if they’re not legally compelled to do so.

Sellers should tell the truth to potential home buyers not just because it’s the right thing to do but also because they want to keep their good names and avoid the inconvenience and cost of a legal battle.

It’s understandable to feel a little lost with all the real estate lingo and the disclosure process. Fret not. It is also very possible to sell your home “as-is” and accept a cash offer from a real estate investor. 

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