The Importance of a Disclosure Protection Plan
Home sellers often think that once the sale is complete and the new owners have moved into a property that everything is done. But, for many home sellers, what should be an exciting post-sale time takes an ugly turn when new owners bring forward legal action, sometimes referencing issues that the home seller had no knowledge of.
CRES Insurance Services, a leader in real estate insurance, has shared a few of their scariest seller lawsuits:
Failure to Disclose a Shower Leak
New owners discovered that a 15-minute shower in the master bathroom caused water to leak from cracks in the tile. The leakage was not detected in the home inspection because water had to run for at least 15 minutes to start leaking. The home sellers did not disclose this leak because they were not aware of it; they’d never taken a 15-minute shower.
The issue was settled for $17,500 to the buyer in addition to covering seller’s defense costs.
Failure to Disclose Shoddy Repairs
A home seller had the sewer line rerouted under the home. The AC ducting and return airline were disconnected and crushed as a result of the rerouting. The plumber also left debris under the house and put in temporary blocking to hold up the piping. The home seller was not aware of any of the issues with the plumber’s work and the issues were not discovered by the home inspector who evaluated the property prior to sale.
The issue was settled for $17,500 from the seller’s Disclosure Protection Policy, despite the fact that the demand probably should have named the plumber and/or home inspector.
In both of these instances, the home sellers were blindsided by legal action due to an unknown therefore undisclosed defect - and would have paid heavily for it had they not had a Disclosure Protection Policy. Real estate agents buy protection to account for this type of demand - E&O coverage - but home sellers have traditionally been completely unprotected.
CRES Insurance Services now offers a Disclosure Protection Plan, exclusively for sellers who complete their disclosures within the Glide platform. This optional coverage provides protection in the case of legal action associated with unknown and undisclosed property defects. Sellers opting for this plan have peace of mind that they’ll be covered in the case of a disclosure-related dispute.