Material VS Latent Facts

Let’s talk about material & latent facts! 🛠

As a Realtor, I have certain responsibilities - one of which being disclosure of all material facts. When it comes to real estate transactions, disclosure is of the utmost importance. But what is a material fact? It’s something that would be significant in terms of deciding whether to purchase a property or not.

Here's some examples of material facts:

• A previous roof leak that has caused staining
• Replacing a light fixture over the island
• Replacing the flooring
• The presences of pets on the property

Let's focus on the example of a previous roof leak that has caused ceiling staining. This is an issue that has caused visible damage, and regardless of whether it has been fixed or not, it is considered a material fact because the seller has knowledge of the issue AND it can be a deciding factor whether someone would want to purchase the property or not.

Now let’s talk about latent facts - like mold growing in your crawl space. Latent facts are things that are not obvious - how often do you go into your crawl space? Would you know what to identify for mold? Likely a seller wouldn’t have knowledge of this issue, and it is outside of their scope of knowledge - therefore would be considered a latent fact.

Here are some examples of latent facts:

• Mold in the crawlspace
• Moisture behind the drywall in the shower/tub
• Wiring that is not up to present day code but functioning

Again, it is anything that a seller/owner would not have knowledge of and is outside of their scope of expertise. All of these problems can exist without showing physical signs that would give way to an issue being present. 

Now I explain all of this because going back to my responsibility as an agent, I have to disclose ALL material facts to the transaction - that means if I know of ANY issues I will disclose that to you. Or if I am representing a seller, I will urge them to be as transparent as possible with all information on their Seller's Real Property Disclosure form which will be presented to the buyer prior to purchase. One of the biggest reasons why people get into law suits in real estate is due to a lack of disclosure - so I  will always suggest having a licensed inspector take a look at the property prior to purchase to make sure that we've got as much information as possible.