If a house had fire damage and an investor e.g. myself remodels and brings it up to code, when I flip, do I disclose to the buyer that the house had prior fire damage ? I am new to investing so just trying to think of how this scenario would be handled. Thank you all in advance!
Hi @Brenda Akinyi , For me Yes, you need to disclose it to the buyer because if they find out on their own, they may wonder what else you are hiding from them and decide not to buy your house. Well, I believe that most experts agree – it is better to be fully transparent with buyers. Tell them there was a fire and then explain exactly what you did to repair the damage.
Also, keep in mind that in most states you are required by law to tell buyers about a fire. Trying to keep a fire secret could lead to penalties down the road.
@Wale Lawal thanks for your feedback! Makes sense to disclose to the buyer. Do you think the prior fire damage could make it harder to sell or rent?
@Brenda Akinyi I bought a property in July that the inspection turned up fire damage under the eaves of both buildings. It is a 3 unit with 2 units in the main building and a 1 unit cottage. The inspector climbed into tiny crawl spaces with his flash light and said the beams were huge and that they were blackened but still thoroughly intact and there was no structural damage to either building. I inquired at the local historical society, it’s a small town, and was told there had been a fire there in the 50s and the family had rebuilt.
The inspector said it was likely the seller was unaware of the damage.
In the future I will likely disclose this now that I know about it. I am not disclosing it to tenants or future potential tenants.
@Brenda Akinyi Ask yourself this question: If I were buying a house that had been rehabbed following a fire, would I want to know about it?
Treating others the way you would want to be treated is always a good way to go.
If that's not convincing enough, then remember that the best way to avoid liability (lawsuits) is to disclose, disclose, disclose - and do it in writing so you have a paper trail if a defect comes up later.
@Brenda Akinyi I personally don’t think so! Tenant appreciate honest, Just make sure you explain exactly what you did to repair the damage.
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