Do you have a real Hatfields vs. McCoys situation going on at your place? You trim your tree and some of the branches fall in the neighbor’s yard. Then they let their dog do his business in yours. Before long, you’re used to the passive aggressive notes on your door and the toxic smell of their Saturday mail burning habit. We’ve all had a bad neighbor.
But when does a lousy neighbor become a necessary home sale disclosure? That is, something you have to inform potential buyers about in writing. Well, sooner than you might think. You don’t have to tell the buyer that you can sometimes hear the neighboring condo’s TV through the wall — that’s typical multi-unit activity. But a neighbor who DJs parties until 4am at his place? Yeah.
Here are some things to know about when you must disclose a disruptive or otherwise annoying neighbor as a part of your home sale in California.
What are Common Home Disclosures in California?
As a Sacramento home seller, you’re bound to California’s fairly strict home disclosure laws. You’ll complete the Transfer Disclosure Statement (TDS), which you can get from your real estate agent or the California Department of Real Estate. Disclosures cover a wide range of topics, including the structural state of the home, recent deaths, room additions, and natural hazards like flood zones or frequent forest fires.
Also required is the disclosure of any known “noise, nuisance, or other problems” in the neighborhood. You must tell potential buyers if your neighbor has threatened a lawsuit or if there are material facts related to the neighbor that might affect their decision to buy the house. In other words: You don’t have to disclose that your neighbor plays basketball in the back yard, but you do have to admit they set off fireworks twice a week.
When to Disclose the Jerk Next Door
Deciding what to consider a “material fact” can be challenging. Material facts are only those things could actually inform the buyer’s decision. Does the fact that your neighbor has an occasion party count as material? Or does it only matter if it’s every Friday and Saturday night. Your best bet is to disclose more than you think is necessary, but you also don’t want to unnecessarily scare off potential buyers. Let’s look at some specific examples where disclosures are definitely necessary.
- Your neighbor loves to cite the city code incorrectly and threaten legal action because your grass is too tall
- You hear more music coming from next door than is probably typical; as in, they clearly started a garage band
- Your next door neighbor has a violent dog and they refuse to keep it safely leashed up
- Your neighbor frequently lets piles of trash accumulate and you can smell it, making the back porch unusable
- Your neighbor indicates that your backyard bbq is too loud by throwing rocks into the yard
Basically, any buyer will expect to have some contact good and bad with neighbors. But if something could be a deal breaker to the average person, you better add it to the disclosure.
Consequences of Non-Disclosure
If you don’t let buyers know about your bad neighbor, you could find yourself in hot water. If they notice the issue during an inspection, the buyer might just pull their offer and send a nasty note along. However, if the issue doesn’t arise until the deal is done and they move in — you’ll find your problems much worse. You could end up in litigation for failure to disclose your neighbors heavy metal naked yoga habit. It’s not worth it. Fill out your disclosure forms as honestly as possible. While it sucks that your neighbor could tank your sale when all you want to do is escape them, you should still be honest. Eventually someone will come along who decides they can deal with loud music or weekly foam parties.
If your neighbors are hindering your home sale, you can always try to get the HOA or the city to have your back. And you can sell to a cash buyer who knows how to add some sound proofing to the home during renovations. If you’re having trouble selling because of a lousy neighbor, give us a call and see if we can make an offer!