I'm selling a flip in TX and there is a PVC drain redirect running outside along the back of the house and connects into the ground to get to the city drain. This was a DIY fix from the previous owner and unknown to me was not up to code. The pipe functions just fine as intended. Without my or my Realtor's knowledge, the buyers agent contacted the city to see if a permit had been pulled on the house to try and find out if the pipe would be up to code, there was no permit and advised my Realtor of this. He also went on to advise my Realtor that "it's illegal to be aware of this issue and not fix it and that she could lose her license if she did not advise me. He also said "regardless of who buys the house I have to legally get a permit and make sure everything is up to code." Basically, I'm trying to find out if what this buyers Realtor is saying is true; whether or not if everything he's saying is true, or just some of it, or none of it at all. This guy has quickly taken over the number slot on my sh!t list....
It's not illegal to be aware of a fault and not disclose it. It's however something that can be taken to civil court (you sued over). You can't go to jail for it less someones dies because of it or something crazy.
Should you fix a now known problem....yes. Do you have to? No. Disclose the problem and be done with it.
Plenty of houses aren't up to code. It may limit your financing options for a buyer once disclosed but you can cross that bridge when you come to it.
Call the city yourself and find out what's the scoop. Find out what needs to be done to make it right. Be nice to them with hat in hand and humble as hell. Explain to them the situation and they might help. You can't bury your head in the sand at this point. It could come back and bite you.
Originally posted by @Nick R. :
"it's illegal to be aware of this issue and not fix it and that she could lose her license if she did not advise me.
This is surely controlled by state law. I can't specifically speak for TX law.
I suspect this is bunk and there is no need to repair it. I suspect it is an exaggeration of the actual requirement. There probably is a requirement to disclose the defect. TX being a conservative state may not require the disclosure, but I believe it is typical in most states.
What disclosures are needed should be a very easy thing to check. Shame on your real Estate agent for not knowing whether the charge from the other agent is true or not. Your agent should ask his or her broker. If that doesn't give you a clear answer you need to get a new agent and broker.
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