The Need to Disclose Defects in Seller’s Disclosure

Did you know that if you’re selling your home in New Jersey, you (and your real estate agent) have a legal duty to disclose any known defects in the property that might affect the buyer’s use and enjoyment of the property?

Historically, NJ sellers weren’t required to complete the Seller’s Property Condition Disclosure Statement — it was optional. That changed since August 2024, when the Seller’s Property Condition Disclosure Statement was made mandatory.

Here’s what that really means for you as a seller.

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There are two kinds of Defects

1. Physical defects

The kind of defects you can generally see when you buy a house. For example:

• A door with a missing knob.
• Scratched hardwood floors.
• That cracked tile in the bathroom.

Physical defects don’t have to be disclosed – a buyer can see them, so they’re not your responsibility to formally disclose.

2. Latent defects

These are the hidden problems — the ones a buyer won’t notice on a tour or on a normal inspection.

Under New Jersey law, if the Seller knows about a latent defect that:

• Makes the home unsafe or uninhabitable,
• Affects the health or safety of the buyer, or
• Impacts the buyer’s ability to live comfortably in the home,

👉 Then the Seller must disclose this defect.

And since August 2024, NJ has made the Seller’s Property Condition Disclosure Statement mandatory. That means Sellers must disclose every major hidden physical defect they know about – including what a home inspector might be unable to see..

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Examples of What Sellers Must Disclose in NJ

If you or your agent knows about it, it must be disclosed. That includes:

• Leaks in the basement or roof.
• Termite issues (past or present) that were never treated.
• Structural cracks or foundation problems.
• Additions, decks, or finished basements built without permits.
• Flood history.
• Underground oil tanks.
• Non-paying tenants.
• Major mold problems.

Basically: if it could affect safety, livability, or cost the buyer money, it belongs on the disclosure.

⚠️ Note: A murder or suicide that occurred inside a home does NOT have to be disclosed – but you can’t ask your REALTOR to lie if someone directly questions them. So, if a death has occurred in your home, be prepared to instruct your REALTOR about how to respond, keeping in mind that they cannot be instructed to lie.

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The Agent’s Role

Agents aren’t off the hook here either. If you tell your REALTOR about a problem, they can’t keep it “off the record.” They have a duty to disclose what they know.

Buyer’s agents also have a duty: due diligence. That means checking into the property’s history, asking the right questions, and making sure their client is protected.

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Our Best Advice

• Be honest. If you’re a seller, be honest with your REALTOR about your home – nobody wins if you don’t disclose what you need to disclose.
• Precaution with a pre-listing inspection. We highly recommend getting a pre-listing inspection done for the many reasons it works in the seller’s favor, but you’ll have to disclose what it uncovers — you won’t be able to just file the inspection report away and pretend it never happened. A pre-inspection lets you fix small issues before buyers see them, helps you price the home accurately, and shows buyers that you’re transparent and serious. In today’s market, that kind of confidence can make your home stand out.
• Keep records. Permits, receipts, contractor invoices — all of it helps prove you addressed issues properly.
• Ask yourself: If you were buying this home, would you want to know?

If you’re not sure whether to disclose something, the answer is almost always: yes, disclose it. It’s better to lose a buyer upfront than face a lawsuit later.

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