Seller Disclosure: Protection Through Transparency
The Legal Framework
Texas law requires sellers to disclose known material defects. The Keenan Group has guided 1,000+ sellers through this process. But beyond legal requirements, strategic disclosure protects you from post-sale liability and builds buyer confidence.
Texas disclosure requirements:
- Seller's Disclosure Notice (TREC form)
- Lead-based paint disclosure (pre-1978 homes)
- MUD/PID disclosures (if applicable)
- HOA documentation
- Known material defects
The Seller's Disclosure Notice
Required disclosures include:
Structural elements:
- Foundation issues or repairs
- Roof condition and age
- Structural modifications
- Additions or renovations (permitted?)
Systems and mechanicals:
- HVAC age, condition, last service
- Plumbing issues or repairs
- Electrical problems or updates
- Water heater age and type
Environmental factors:
- Flooding history
- Drainage issues
- Previous insurance claims
- Mold or moisture problems
Property history:
- Previous repairs
- Insurance claims
- Permit history
- HOA violations
Common Disclosure Mistakes
Mistake 1: "I didn't know"
- Courts expect sellers to know their property
- Pre-listing inspection establishes knowledge
- Previous repair records indicate knowledge
- Insurance claims on record
Mistake 2: Minimizing issues
- "Slight foundation movement" vs. actual condition
- "Older HVAC" vs. system age
- "Some roof wear" vs. years remaining
- Vague language creates liability
Mistake 3: Not updating
- Disclosure should be current at closing
- New issues must be communicated
- Changes in condition matter
- Update in writing
Mistake 4: Over-disclosure
- Opinion vs. fact confusion
- Neighbor disputes (usually not required)
- Future speculation
- Non-material issues
Strategic Disclosure Approach
Our disclosure philosophy:
When in doubt, disclose. It's far better to over-share than to face post-sale legal action. Most buyers appreciate transparency.
How to disclose effectively:
- Be factual, not editorial:
- "Foundation repaired in 2019 by XYZ Company"
- Not: "Foundation had some issues but should be fine now"
- Attach documentation:
- Repair invoices and warranties
- Inspection reports
- Permit records
- Professional assessments
- Date everything:
- When you discovered the issue
- When repairs were made
- When conditions changed
- Current status
Specific Disclosure Scenarios
Foundation issues:
- Disclose: Any repairs, engineering reports, known movement
- Attach: Engineering reports, warranty documents
- Pricing: May need to adjust or offer credits
Previous flooding:
- Disclose: Any water intrusion, claims, moisture issues
- Attach: Insurance claim records, remediation reports
- Note: Flood zone status separately disclosed
Roof condition:
- Disclose: Age, known issues, repairs
- Attach: Inspection reports, warranties
- Pricing: Adjust for remaining life
HVAC age/condition:
- Disclose: Installation date, service history, issues
- Attach: Service records, warranty information
- Buyer expectations: Replacement credit if old
Neighbor issues:
- Generally: Not required to disclose
- Exception: Active litigation or HOA enforcement
- Strategy: Answer honestly if asked directly
Deaths on property:
- Texas: Not required to disclose (except AIDS-related, which is protected)
- Strategy: Answer honestly if asked
- Stigma: Not a material defect legally
Common Disclosure Pitfalls in Austin
Beyond the general categories above, these are the specific mistakes the Keenan Group sees most often in Austin transactions:
- Failing to disclose known foundation issues. Central Texas sits on expansive clay soils (particularly the Taylor Clay and Del Rio Clay formations) that cause seasonal foundation movement. If you have had piers installed, cracks repaired, or an engineering report done, all of it must be disclosed with documentation. Buyers will find out during their own inspection -- and discovering undisclosed repairs kills deals and creates legal exposure.
- Not mentioning previous flooding or water intrusion. Austin's flash flood risk is real, especially in properties near Shoal Creek, Williamson Creek, Onion Creek, or any low-lying lot. If your home has taken on water -- even once, even in the garage -- disclose it. Include insurance claim records and remediation reports if they exist.
- Omitting HOA disputes or pending special assessments. In communities like Barton Creek, Rob Roy, and Circle C, HOA special assessments can run $5,000-$20,000+. If your HOA has voted on or is considering a special assessment, that information belongs in the disclosure package. Same for any active violations, fines, or disputes involving your property.
- Not disclosing recent repairs that concealed underlying problems. Painting over water stains, patching drywall without addressing the leak behind it, or replacing carpet over subfloor damage does not eliminate the disclosure obligation. If you made a cosmetic repair to address a structural or moisture problem, disclose both the original issue and the repair.
- Forgetting to mention easements or utility access issues. Many Austin properties have utility easements, drainage easements, or shared driveway agreements that affect what you can build or where you can landscape. These are recorded on your survey and title, but buyers deserve a clear heads-up in the disclosure if they affect daily use of the property.
Special District Disclosures
MUD (Municipal Utility District):
- Separate disclosure required
- Tax implications significant
- Services provided explanation
- Assessment history
PID (Public Improvement District):
- Annual assessment disclosure
- Purpose of assessment
- Payment history
- Future obligations
HOA Disclosure Requirements
Required HOA documents:
- Governing documents (CC&Rs)
- Current financial statements
- Meeting minutes (12 months)
- Reserve study if available
- Current rules and regulations
- Assessment schedule
Common HOA disclosure issues:
- Special assessments pending
- Litigation involving HOA
- Rule violations on property
- Rental restrictions
Liability Protection
How disclosure protects you:
- Limits post-sale claims
- Establishes knowledge baseline
- Documents your good faith
- Provides legal defense
Best practices:
- Complete disclosure form thoroughly
- Attach all relevant documents
- Keep copies of everything
- Date and sign properly
- Update if anything changes
Post-Disclosure Buyer Questions
When buyers ask for more:
- Answer honestly and completely
- Document your responses
- Consult agent before answering complex questions
- Consider legal counsel for unusual situations
Reasonable buyer requests:
- Additional inspection access
- Professional assessments
- Documentation copies
- Clarification on disclosed items
Need Disclosure Guidance?
The Keenan Group helps sellers navigate disclosure requirements for every listing. We ensure your disclosures are thorough, accurate, and protective.
Contact us: 512-415-7653 | keenan@compass.com
Related Resources
Frequently Asked Questions
What must sellers disclose in Texas?
Texas law requires sellers to complete a Seller's Disclosure Notice covering known material defects, previous flooding, foundation repairs, roof age, and environmental hazards. Homes built before 1978 also require a lead-based paint disclosure. Properties in a MUD, PID, or HOA carry additional mandatory disclosures. The Keenan Group helps sellers prepare thorough, legally protective disclosures on every listing.
Can you sell a house as-is in Austin?
Yes, you can sell as-is in Texas, but you still must complete the Seller's Disclosure Notice and disclose all known material defects. Selling as-is means you are not agreeing to make repairs, not that you can hide problems. In Austin's current market, as-is listings typically sell at a 5-15% discount depending on condition and neighborhood.
What happens if a seller fails to disclose in Texas?
A seller who fails to disclose known material defects can face lawsuits for fraud, negligent misrepresentation, or violations of the Texas Deceptive Trade Practices Act. Buyers can recover repair costs, diminished value, and attorney fees. This is why the Keenan Group recommends over-disclosing rather than under-disclosing on every transaction.
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