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What Should Sellers Disclose When Selling Their Home After the Marshall Fire?

Under Colorado law, sellers are obligated to disclose known adverse material facts about their Property. This obligation is outlined in the Buy Sell Residential Contract, specifically, Section 10. The Sellers must also complete a Seller’s Property Disclosure Form when listing the Property for sale. This obligation of disclosure has also been reiterated by the Colorado Courts per In re Gattis, 318 P. 3d 549 (Colo. App. 2013) where the courts found a duty to disclose based in tort—beyond the contractual obligations. As a result, by failing to disclose known adverse material facts about the Property, sellers may face both contractual and tort-based monetary damages.

What is a “known adverse material fact”? A fact is “material if the consumer’s decision might have been different had the truth been disclosed.” Id.  So it is safe to assume that any disclosure about the Marshall Fire and its impact (potential or otherwise) on the Property is material to potential buyers.

Sellers are rarely experts in evaluating the extent of the damage of the Marshall Fire and should be cautious in advising potential buyers about the condition of the Property. Because of the Marshall Fire, the Property may require demolition, site work, and/or construction—all of which may require permits or government approvals. If construction is not required, the Property may still have otherwise caused damage via smoke or exposure to any other noxious fumes; heat; wind and/or damage caused by flying objects. Regardless of the damage to the structure of the Property, there might have been damage to the utility connections, communication services, or other underlying infrastructures.

As a result, sellers will want to be deliberate with how the sellers make disclosures about the Property and the impact of the Marshall Fire on the Property.

This article is not intended to provide legal advice to the reader. If you have questions, please contact Caroline Young.

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