Is an inspection report a material fact that must be disclosed?

QUESTION: A listing agent in my firm has been asked by a buyer agent to provide a home inspection report on the property that was done for a previous buyer who terminated their contract on the property.  The listing agent has disclosed in an email to the buyer agent several items of concern addressed in the report that the listing agent considers to be material, but the seller has asked her not to release the report itself.

The buyer agent insists that since the report was sent by the previous buyer’s agent to the listing agent, she must give the report to anyone else who might make an offer on the property. Is the buyer agent right?

ANSWER: We believe the answer to your question is “no.”  In our view, your listing agent is required to disclose any material facts contained in the inspection report but she is not required to disclose the report.  In other words, the report itself (or its existence for that matter) is not a material fact that must be disclosed.

Having said the foregoing, your listing agent’s seller may want to reconsider their position.  The buyer is aware that the inspection report exists, and even thought the listing agent may have already disclosed any material facts addressed in the report, the buyer may feel that the seller’s refusal to provide the report itself is an attempt to hide something about the property.

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