Estate Sale: "No Representation" and a Failing Septic
A 1972 split-level is listed by the personal representative of an estate. The PR never lived in the home and has filled much of the state disclosure form with "no representation." Known facts: the septic system was installed in 1979 without a permit and effluent has been surfacing in the yard since spring; the basement has been treated for mold twice; the prior owner died at home of natural causes; the property lies in a mapped AE flood zone and the last lender required flood insurance; coal was severed from the surface in 1958 and the gas rights in 2004.
The buyer's offer came in at list price with a 10-day inspection period, written after receiving the disclosure form, and says the buyer takes the property "as is."
1. Which items must be affirmatively disclosed, and can the personal representative rely on "no representation" throughout the form?
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"No representation" is a limited tool, not a shield. It is available for matters genuinely outside the transferor's knowledge - for example, a roof installed by a prior owner whose records the PR has never seen. It is not available for matters the PR actually knows or has records of. An estate holds the decedent's records, service invoices, prior insurance claims, and tenant history; the PR is charged with what the estate knows.
Must be disclosed:
- Septic failure - a system installed without a permit and surfacing effluent is a known material defect and, in most jurisdictions, a public health issue. The PR knows it. Disclosure is mandatory, and the listing should direct the buyer to the county health department's records.
- The mold history - two treatments imply an unresolved moisture source. A pattern of "no representation" entries on items the PR or the estate's records document edges from omission into misrepresentation.
Need not be volunteered: the death from natural causes. It is not a physical defect of the property and does not affect value or use. It is not a condition the seller must affirmatively disclose - but if the buyer asks directly, the licensee answers truthfully.
What the licensee should do: not accept the form as filed. Have the PR pull the health department file, the remediation invoices, and the insurance loss history, then amend the disclosure before further showings, delivering the amended form to the buyer in writing.
2. What must the buyer be told about the flood zone and the severed mineral rights, and what should the licensee recommend?
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Flood zone (AE). Material to value, insurability, and the buyer's monthly payment. The buyer needs: (1) the fact of the AE designation and the base flood elevation, (2) whether an elevation certificate exists, and (3) a real flood insurance quote before the inspection period ends, because premiums on a mapped AE property can exceed the property tax bill and there is generally a waiting period for a new flood policy, with a limited exception for lender-required coverage at closing. A lender will require coverage; a cash buyer should still price the risk.
Severed minerals - the more serious issue in this state. The buyer is purchasing the surface only. Coal was severed in 1958 and gas in 2004, meaning:
- The mineral owner may hold rights of access, surface entry, and reasonable use of the surface, and subsidence risk depends on the terms of the 1958 deed and how the coal was worked.
- The buyer's title policy must be ordered to address the severances; standard coverage may except them. The recorded severance instruments must be pulled and read, not summarized by the agent.
- Resale and financing can be affected, and any future drilling or surface operations are outside the buyer's control.
Recommendation: a title search plus owner's title insurance with mineral and access endorsements, a review of the severance deeds by counsel, and written disclosure of both items on the seller's disclosure and in the listing remarks.
3. The buyer signed an "as is" offer with a 10-day inspection period. Does that waive the buyer's claims, and what should happen before day 10?
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"As is" is not a liability release. It means the buyer accepts the property in its present condition and will not demand repairs as a condition of closing. It does not waive: (1) the seller's duty to disclose known material defects, (2) liability for fraud or intentional misrepresentation, or (3) any statutory disclosure obligation. A seller who fills a form with "no representation" while knowing the septic is failing cannot hide behind the buyer's "as is" signature - the two provisions are read together, and the disclosure duty survives.
The buyer's exposure here is timing, not doctrine. The 10-day inspection period is the buyer's only practical leverage:
- Order the septic evaluation (and a permit/records search at the health department), a moisture/mold assessment of the basement, and a flood insurance quote, all in the first few days.
- Deliver any request for repair, credit, or termination in writing within the period. A day late is generally a waiver of the contingency.
- If the vendors cannot get out in time, request a written extension of the inspection period before it expires - never assume the deadline moves on its own.
- Re-deliver the amended disclosure to the buyer and confirm receipt in writing, so the record shows what the buyer knew and when.