What Is Negligent Omission In Real Estate?
Negligent omission in real estate refers to a failure to disclose a material fact about a property—not because of intent to deceive, but due to carelessness, lack of knowledge, or oversight—that results in harm or financial loss to the other party (usually the buyer).
🧾 Definition:
Negligent omission occurs when a seller or agent unknowingly fails to disclose important information they should have reasonably known, and that failure negatively affects the buyer’s decision.
🧯 Example Scenarios:
| Scenario | Is It Negligent Omission? | Why? |
|---|---|---|
| Seller forgets to disclose past flooding in the basement, which they knew about | ✅ Yes | Seller had knowledge but failed to disclose due to carelessness |
| Agent doesn’t verify that a room addition was permitted and tells the buyer it’s part of the square footage | ✅ Yes | The agent had a duty to check permit records |
| Seller never knew there were termites and honestly didn’t suspect any | ❌ No | Not negligent if the issue was truly unknown and there was no reason to suspect it |
📜 Legal Difference:
| Term | Definition |
|---|---|
| Negligent Omission | Careless or unintentional failure to disclose something important |
| Fraudulent Omission | Intentional hiding of a known issue to deceive the buyer |
| Innocent Omission | Genuinely unaware of the issue, with no duty breached |
⚖️ In Arizona Real Estate (and many states):
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Sellers are legally obligated to disclose material defects.
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Licensed agents must perform due diligence and cannot plead ignorance.
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Failure to disclose known or reasonably knowable issues can lead to lawsuits, rescinded sales, and damages—even if the omission was not intentional.
🛡️ How to Avoid Negligent Omission
If You’re a Seller:
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Use the Arizona Seller Property Disclosure Statement (SPDS) thoroughly
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Disclose anything that could affect value or safety—even if it was repaired
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Don’t assume something is “not a big deal”—let the buyer decide
If You’re an Agent:
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Verify additions, permits, and lot lines
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Investigate red flags in disclosures or neighborhood history
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Document everything in writing
Checklist of Common Disclosures Required in Arizona Real Estate
Here’s a Checklist of Common Disclosures Required in Arizona Real Estate — based on the Arizona Association of REALTORS® guidelines and state law. This helps both sellers and agents avoid negligent or fraudulent omissions during residential property sales.
✅ Arizona Real Estate Disclosure Checklist (Residential Sales)
📋 General Property Disclosures (SPDS Form)
Required under Arizona law (A.R.S. § 32-2156) via the Seller Property Disclosure Statement (SPDS):
| Disclosure Item | Required? | Notes |
|---|---|---|
| ❏ Past or present roof leaks or repairs | ✔️ | Include dates and receipts if available |
| ❏ Plumbing problems (leaks, sewer issues) | ✔️ | Even if previously repaired |
| ❏ Electrical system issues or upgrades | ✔️ | Include permits, if applicable |
| ❏ HVAC problems or replacements | ✔️ | Note service dates or warranty status |
| ❏ Water damage or mold history | ✔️ | Especially from leaks or flooding |
| ❏ Termite/wood infestation treatment or damage | ✔️ | Arizona termite reports often included in escrow |
| ❏ Foundation or structural problems | ✔️ | Cracks, settling, shifting walls, etc. |
| ❏ Roof age and warranty | ✔️ | Many buyers request a 2-year roof certification |
| ❏ Appliance conditions and inclusions | ✔️ | Dishwasher, stove, fridge, etc. |
| ❏ Pool/spa condition and maintenance history | ✔️ | If applicable |
| ❏ Room additions or remodeling | ✔️ | Must note if permitted or unpermitted |
| ❏ Neighborhood nuisances or noise issues | ✔️ | e.g., barking dogs, traffic, trains |
| ❏ Any past insurance claims (especially flood/fire) | ✔️ | Even if repaired; buyers may ask for CLUE report |
| ❏ Property line or fence disputes | ✔️ | Include survey or legal documentation if applicable |
📜 Legal & Regulatory Disclosures
| Disclosure Item | Required? | Notes |
|---|---|---|
| ❏ Lead-based paint disclosure (pre-1978 homes) | ✔️ | Federal law (includes EPA pamphlet) |
| ❏ HOA/CC&R information | ✔️ | Seller must provide documents & contact info |
| ❏ Well/septic system information | ✔️ | Include inspection history and permits |
| ❏ Airport/flight path proximity | ✔️ | Required in many AZ urban areas |
| ❏ Environmental hazards (e.g., radon, asbestos) | ✔️ | If known or tested |
| ❏ Meth lab or biohazard site (past use) | ✔️ | State requires disclosure even if remediated |
| ❏ Military/air force noise zones | ✔️ | E.g., Luke AFB impact zones |
| ❏ Sex offender notification | ⚠️ Optional | Not required—but buyers must be told how to check AZ registry |
| ❏ Death on property | ❌ Not Required | Unless it affects physical condition or market value |
📂 Additional Documents Often Provided
| Item | Description |
|---|---|
| ❏ CLUE Report (Insurance Claims) | Buyer may request; shows 5-year claim history |
| ❏ Termite (WDIIR) Report | Required by lenders and highly recommended |
| ❏ Roof Certification | Optional, but common for older homes |
| ❏ Home Warranty Info | If one is being offered or transferred |
| ❏ Receipts for recent repairs | Helps buyers feel confident and reduces surprises |
🧠 Tips for Sellers:
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If you’re unsure whether to disclose, the rule of thumb is: disclose anyway.
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Don’t rely solely on memory. Review service receipts and permits.
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Fill out the SPDS completely and honestly — this is your best legal protection.
Craig Cherney is a trusted client advisor and a sought after real estate lawyer and expert witness who is hired by the nation’s top Real Estate Litigation Attorneys to help resolve their litigated real property matters. Craig has appeared as a testifying expert witness before judges and juries in California, Arizona, Nevada and other jurisdictions across the country. Craig Cherney, Esq. Expert Witness Real Estate. 480-399-2342. If you are litigating an easement case, Craig Cherney might be able to help you advance and win your case.