Texas Real Estate Sales Agent ExamProperty DisclosuresMedium
A buyer is purchasing a newly constructed home from a builder. The builder provides a warranty for the home. Is the builder required to provide a Seller's Disclosure Notice under Texas law?
- AOnly if the builder is aware of specific defects not covered by the warranty.
- BYes, all sellers of residential property in Texas must provide a disclosure notice.
- CNo, newly constructed homes that have not been previously occupied are generally exempt.
- DYes, but the builder can provide a simplified disclosure form due to the warranty.
Show answer & explanationAnswer & explanation
Correct answer: C. No, newly constructed homes that have not been previously occupied are generally exempt.
Texas Property Code §5.008 specifically exempts the sale of a new residence that has not been previously occupied from the requirement to provide a Seller's Disclosure Notice. The builder's warranty typically addresses potential defects.
Why the other options are wrong
- A. The exemption is for new construction itself, not conditional on the builder's knowledge of defects.
- B. This is incorrect; there are specific exemptions to the disclosure requirement.
- D. There is no provision for a 'simplified' disclosure form based on a warranty; it's either required or exempt.
New Construction Disclosure Exemption
In Texas, the sale of a new residential property that has not been previously occupied is exempt from the statutory requirement to provide a Seller's Disclosure Notice.
- Applies to 'new residence' and 'not previously occupied'.
- Found in Texas Property Code §5.008(e).
- Builder warranties typically cover new construction defects.
- Still subject to common law disclosure of known, latent defects.
Memory trick: New build, no old stories, no disclosure worries.