Disclosing defects is a necessary part of selling a commercial property. However, some sellers may be hesitant about doing so out of fear that it will scare away potential buyers. It can be tempting to withhold information, but this may lead to more significant consequences in the future. Here are some things to remember about disclosing defects when selling commercial real estate.
Illinois sellers are obligated to disclose both material defects and potential problems if they could possibly affect a property’s value. Sellers cannot purposely hide significant defects, either. Disclosing previous defects that have since been corrected may also be a good idea, although this depends on how serious past problems were.
Hiring an independent inspector to gauge the condition of a property is generally well advised. The inspector’s report can also provide evidence of no wrongdoing should a buyer claim there was an undeclared defect. Of course, an inspection may also uncover defects that the seller was not aware of, which means providing additional disclosure to the buyer. This might feel like a downside, but it really helps give a seller the confidence that he or she disclosed all defects during the sale.
Property owners choose to sell commercial real estate for all kinds of reasons, including financial stress. Sellers who are in this situation might worry that disclosing defects will negatively affect property values or scare away potential buyers, but the legal fallout of hiding defects can be much greater. Someone who is concerned about the different steps of selling his or her property may want to consider speaking with an attorney who is experienced with Illinois real estate law.