Material Fact Real Estate


“As a real estate buyer, seller, broker, and/or agent, you should be well-aware of the term material fact real estate. A material fact in real estate is a serious and very important terminology that could severely affect any decision with regards to property. Find a comprehensive approach to understanding the term ‘material fact real estate’ in this article. Also, learn how our real estate lawyers at Attorneys Real Estate Group can help you in matters related to it.”




The term ‘material fact real estate’ is one such preliminary matter that can severely impact a real estate transaction.


In every real estate transaction, whether it is for buy, sell, or lease, it is mandatory to establish certain things in the very beginning. Things that could necessarily and materially affect the feasibility of any interest that any party to a real estate transaction has or will have in the future.

The term ‘material fact real estate’ is one such preliminary matter that can severely impact a real estate transaction. This article guides comprehensively on what you need to know about dealing with material facts in real estate transactions.



What is material fact real estate?

The term ‘material fact real estate’ means a fact that if known to the buyer of a real estate, may cause him to alter his decision concerning how he wants to further pursue a real estate transaction.

Material facts tend to be important for both residential and commercial nature properties and can significantly impact their transaction.

From a wider perspective, a material fact is a fact that could affect a real estate transaction in three ways, namely –

  1. Cause a change to the value of the property,
  2. Causes the buyer or tenant to reconsider their decision to buy or rent the property in question, and
  3. Reevaluate their rental or purchase price offer.

Any change in any one or all the above instances is based on the material fact that the buyer or tenant –

  • Was previously unaware of, and
  • Now is aware of either fully or partially but in substantial amounts with the knowledge that could necessarily cause him to reconsider the terms of the real estate transaction and its impact on his interest.

In general, any fact that could become a subject of real estate price change is deemed a material fact. The other two factors above happen to be an extension of the first one.



An important thing to remember – About material fact real estate and this article

Although material fact forms an integral part of all real estate transactions whether occurring because of buy-sell or tenancy agreement, our focus and way of reference would in most cases reflect real estate buy-sell transactions.

However, if any section of this article remains unclear and you want legal counseling on it, simply call us. All you need to do is simply book a free consultation session with Attorneys Real Estate Group’s real estate lawyers. Our real estate attorneys near me at Attorneys Real Estate Group are highly competent and would be glad to help. We can help you understand various matters as well as navigate through any issues about material fact real estate.



Understanding the term ‘material fact real estate’ – A comprehensive approach


How does material fact real estate work? – Obligation to disclose by whom

The working principle of material fact real estate is simple to comprehend for both the buyer and the seller. In any real estate transaction, the buyer of a property has certain rights which in essence describe a seller’s duties.

Among a few others, one such important obligation of the seller is to disclose material facts regarding the property being sold.

This means that the buyer has the right to know every information that –

  • could not just assist him to make the right decision,
  • but also help him reconsider his decision if any uncertain circumstances prevail or an unusual event takes place.

Moreover, besides the mandatory obligation of the seller to disclose material fact real estate, the agent or broker involved in a real estate transaction is also obligated to disclose any important fact in his knowledge.


What kind of material fact real estate needs to be disclosed? – Past, Current, and/or Recurring

The simple answer to this question is that all material fact real estate needs to be disclosed to the buyer. This means that any information that could be presumed to be material or essential for the buyer to make the right decision should be disclosed by the seller and the agent or broker involved.

However, it is possible that a seller, agent, or broker may intentionally or unintentionally abstain from disclosing a fact that –

  • is old and relates to the past,
  • no longer exists, and/or
  • has been taken care of, for example, a leak in the roof being fixed many years back before the sale.

Without considering any of the above factors, the buyer of real estate still has the right to become aware of all material facts.

For example, if an agent or broker is aware of any past defect in a property that used to exist a long time back but is no longer present, he should still disclose it to the buyer.


How important is the material fact real estate?

Besides being important, material fact real estate is a must require real estate disclosure in many states in America. This means that a seller, buyer, agent, or broker of real estate should be aware of the things that require to be disclosed.

Additionally, it is also important for these parties to understand the legality, extent, and impact of a material fact real estate on their interest, rights, and duties.

Still, if any party in their limited capacity has any doubts, then it is recommended to seek legal counseling. Since it is possible that what can be taken as material fact real estate for one property may have different applicability on another, taking legal advice becomes highly important.

A real estate lawyer near me can explore your case and advise each party with the most appropriate options. In this way, each party adheres to their obligated role while also minimizing the chances of any adverse consequence that may result from an unforeseen event.



The buyer of real estate has the right to become aware of all material facts.


Important real estate disclosures that a seller must provide to the buyer

If you happen to be a real estate seller and in-between an ongoing transaction to sell a property, this section is surely going to help you. Here is a list of 8 important disclosures that a seller must provide to a real estate buyer –


1. Neighborhood troubles in the form of nuisances

A neighborhood nuisance relates to a troubling and disturbing noise in the adjacent blocks or vicinity of the property. This could cause trouble and/or interference in the normal household routine of the occupants of the property.

Besides unwanted noise, nuisance also includes odors and smells whether pleasant or unpleasant but irritating, appearing from the neighborhood.

The causes of such nuisance can be any landfill sites, farmhouses, shooting ranges, exploration sites, airports, etc.

Different states require different modes of disclosures in this case.


2. Any death that happened on the property

It is not uncommon for certain people to be uncomfortable with anyone’s death or become superstitious as a result.

Whether any person dying on the property being sold should be disclosed or not depends on what your state requires.

For example, certain states do not require disclosure for deaths occurring from natural, suicidal, or accidental causes. Still, deaths from violent crimes or murder may need to be reported.

Similarly, a person’s death resulting from a fault in the property, which was later remedied, may still need disclosure.

Therefore, for better understanding and disclosure requirements in your case, consult a real estate attorney.


3. Risks of any hazards

Certain states require seller disclosures to inform the buyer of any hazards that existed or exist on the property.

For example, risk of any natural disaster like flood, earthquake, tornados, cyclones, heavy rainfall, or even wildfires.

Similarly, the disclosure as to the presence of any environmental contamination, or the use or presence of any toxic or harmful substance such as lead-based paint, or radon gas, also needs to be disclosed.

Some states, in certain circumstances, may also require sellers to disclose information relating to the previous use of the property for any commercial or manufacturing purpose. This is because such commercial or manufacturing activity may have involved using hazardous or harmful substances.


4. Information related to any Homeowners’ Association

If the property being sold falls under the governance of a Homeowners’ Association, such fact is material and requires disclosure.

This is because the Homeowners’ Association normally charges monthly fees and regulates certain membership rules on member homeowners. These things may or may not be interesting for the incoming occupant or the new buyer of the property.

Thus, this information too is a material fact real estate which requires disclosure.


5. Any damages resulting from water

While water is an essential ingredient to survive, it can cause severe destruction if it gets inside a property. Water from any flooding, rains, or even pipe leakage can damage the structure as well as create mold hazards.

This information too falls under the material fact premise and must be disclosed.


6. Repairs done on the property

It is also not uncommon for long residing occupants of a property to have undergone certain repairs at some point. In such a case, sellers need to disclose the repair history of the property as well.

This is because repair history has various aspects, all of which tend to be material. For example, the existence of any past faults and subsequent repairs may form the reason for a fault in the future and subsequent repair.

Examples of common repairs that may need to be disclosed include – soil movement, fault lines, any malfunctioning of the roof, in the walls, fences, flooring, etc.


7. Items not found or found to be missing by the new buyer

It is also possible that the new buyer of the house may not find some things that he otherwise assumed to have gotten with the property. This can create confusion and dispute between the seller and the buyer and/or the agent or broker as well.

To prevent such instances of miscommunication, some states require sellers to mention complete details regarding this issue. Such details include a list of items that the seller intends to leave in the property for the new buyer. This eventually helps clear any doubts and assumptions of the buyer.


8. Other disclosures

Although a detailed discussion of this can be found in the next sections related to the “TDS” form, it is important to highlight it here as well.

Apart from any known or explicitly required disclosure requirements, sellers should also make ‘Other Disclosures’. These disclosures should mention information that could be termed as a material fact.



Any fact that could be taken as material fact real estate requires disclosure, with and under, no exceptional circumstances.


Mode of disclosing material fact real estate – When and how?

As mentioned in an earlier section, material fact real estate isn’t just important but also a requirement in many states.

For example, the California Legislature beyond making material fact real estate disclosures a must requirement, requires additional necessary steps. This includes introducing a properly drafted standard form for this purpose.

This form is titled the “Transfer Disclosure Statement” or the “TDS”. The “Transfer Disclosure Statement” or “TDS” is a must to be filled out document for every seller of real estate.

A real estate seller must fill in the ‘TDS’ form with true information to the best of their knowledge. This form then is to be furnished to the respective buyer before a real estate property may be sold.

Besides the applicable ‘TDS’ form regulated by the California Legislature, other states in America also have similar forms and requirements.

Again, if you aren’t aware of what the material facts real estate laws in your state prescribe you to do, you should always consult a real estate attorney near me.

Remember that since there is no exception for a real estate seller to avoid providing the ‘TDS’ form or any other similar form for this purpose to the buyer, taking the help of a real estate lawyer near me can help you in two ways.

  • First, you get guidance in filling out the form. This ensures that only important information is mentioned and that too using the words with limited and correct interpretation.
  • Second, you do not disclose any unneeded or extra information, and that too in an incorrect section of the form.


Is the “Transfer Disclosure Statement” or similar other forms enough as a disclosure of all important information?

Another way of asking the above question is if the information furnished by way of a “Transfer Disclosure Statement” or “TDS” form can be deemed as conclusive evidence of the fact that all the necessary information has been conveyed by the seller to the buyer or not.

Well, the answer to this question is a straight ‘No’.

Irrespective of providing material fact real estate disclosures to the buyer by way of ‘TDS’ or any other similar form, it might not still be enough.

This means that there exists a high possibility that any disclosure form such as a “TDS” may not explicitly ask for any information that may otherwise be a material fact.

However, this does not exempt a real estate seller to conceal such material fact for which no section appears on the disclosure form.

Remember that a real estate seller, besides an agent and/or broker, must disclose all material facts. And this obligation still stands irrespective of the manner to disclose it.

Therefore, any fact that could be taken as material fact real estate requires disclosure, with and under, no exceptional circumstances.

For example, besides the “TDS” form promulgated by the California Legislature, the California Association of Realtors prescribes a further course of action.

They have developed another form, known as the “Seller Property Questionnaire” or “SPQ”, as an add-on to the “TDS”. The “SPQ” form functions as a supplementary document and contains topics for material fact disclosure in addition to the “TDS”.

Moreover, it also allows the seller to voluntarily mention further information that may construe as a material fact. This way real estate sellers in California can disclose information beyond the apparent scope of the “TDS” and “SPQ”.



What happens when a seller does not disclose material fact real estate?

When a seller or even a landlord and/or their real estate agent and/or broker, fails or intentionally conceals any material fact from the buyer, that person commits a real estate fraud.

In such a case, when the buyer subsequently discovers concealment of material fact real estate and/or suffers from a loss or damage as a result, he can initiate legal proceedings against the seller.

The court presiding over the trial of real estate fraud will decide the outcome based on the severity of the case. The probable outcome in such cases is awarding the buyer with compensation by imposing severe liabilities and monetary fines on the seller and/or the agent.

The nature of such compensation should be to help put the buyer in the position that he would have been had he known all the material facts in the first place and thereby moved with the right decision. The extent of such compensation may also cover his legal expenses incurred because of the current litigation.



Why hire a real estate attorney near me in material fact real estate situations?


Importance of hiring a real estate lawyer near me in material fact real estate cases

Real estate transactions involve technical procedures and complex situations. Knowing what constitutes a material fact real estate is therefore very important for each party involved.

For a buyer, it is his right to have access to all the important information that counts as a material fact. This will eventually help him move in the right direction and escape any otherwise avoidable and negatively impacting situations.

Similarly, for a seller, disclosing material facts at the right time and in the correct mode is also very important. This will save him from facing any unusual liabilities or possible litigation initiated by the buyer in the future.

The same case of the seller applies to the agent as well although to a different extent.

Initiating legal proceedings to claim and recover damages is normal behavior when material facts aren’t disclosed by the seller. This happens when a buyer discovers a previously concealed material fact that could otherwise have altered his decision to buy.

But remember that all this trouble can be prevented by taking the right decision at the right time. And this brings us to recommend a real estate lawyer near me in complex yet easily avoidable material fact real estate situations.



Lawyers and attorneys near me to deal with material fact real estate

If you, as a real estate seller or buyer, are having trouble ascertaining what information should supposedly be regarded as a material fact, we are here to help.

Attorneys Real Estate Group has years of experience in dealing with severely complex real estate situations. Based on our expertise and team of professionally competent lawyers, we can confidently handle any technicality that may exist in a real estate transaction.

Our team of expert real estate attorneys at Attorneys Real Estate Group can guide you if any of the underlying facts in your case require disclosure or not and to what extent.

Simply, give us a call at 916-702-8443 or visit our website at Attorneysre.comYou can also get free legal consultation by filling in the form at this link. One of our expert attorneys in material fact real estate will get back to you as quickly as possible and will be glad to assist you. We look forward to welcoming you soon.