A Hawaii law requires you to reveal every material fact about your home. Here’s what that means, and why hiding one can cost you.
If you’re selling a home in Hawaii, there’s one piece of homework worth doing first: understand what you’re legally required to disclose. The rule that governs it is Hawaii Revised Statutes Chapter 508D. Disclose, or as we like to put it, be honest to a fault.
We don’t say that lightly. Over more than 20 years and 1,800-plus transactions, every lawsuit we’ve been involved in traced back to one thing: disclosure.
In one case, a seller didn’t reveal he was in an active lawsuit with his association, one that carried over to the next owner because it was tied to the property. We found out when a subpoena showed up, and by then the seller had taken off to Panama. In another case, our seller did everything right and fully disclosed, and a buyer still sued over a short-term-rental certificate they lost by not following instructions. We won, but it still cost a couple of thousand dollars in legal fees to be right. That’s the reality, so the goal is to make yourself as bulletproof as possible from the start.
Here’s what that covers.
Material defects. The law requires disclosing every material fact, which HRS 508D defines as any fact, defect, or condition, past or present, that would measurably affect the property’s value to a reasonable buyer. The past can mean a repaired disaster, like a water heater that once blew through the roof. The present might be something a home inspection reveals that you now have to add to your disclosure. And a known future cost counts too.
If your condo building has issued notice of a $10,000 special assessment for new railings, that’s a material fact you must disclose, even though the money isn’t due yet. We’ve watched sellers who knew about an assessment beforehand get forced to circle back and pay for it because they left it off.
Even when you do everything right, it still costs money to be right. Disclosing up front is what keeps you out of court.
History of repairs and renovations. This is where you get to brag a little: a kitchen remodel, a new roof, an updated bath. But it comes with a catch. If you hired your cousin Bobo, who is not licensed and whose whole life revolves around getting paid cash on the weekends, that is going to come up. The seller’s disclosure asks about licensed work and permits directly, and you have to be straight about what was permitted and what wasn’t. So even if you’re years from selling, keep every record: contractor license numbers, permits, quotes, and what you paid.
We gather it all up front and share it with every agent who wants to show the home, which bulletproofs escrow because buyers get the full picture before they ever write an offer.
Environmental hazards. Several disclosure questions live here. Homes built before 1978 likely contain lead-based paint, which carries a separate federally required EPA disclosure form with its own dating rules, and getting it wrong means a hefty fine. Older condos may have asbestos in popcorn ceilings, and Hawaii’s humidity makes mold a real and sensitive issue worth disclosing. There’s even a specific question about aircraft noise, which matters on an island full of military flight paths. That one isn’t subjective. You either have the noise, or you don’t, and locals often stop noticing it, so it’s easy to forget. Disclose it anyway.
One more thing: as agents bound by a code of ethics and a fiduciary duty, if we know a material fact, we’re obligated to disclose it, even if a seller asks us not to. We’ve had sellers request we keep something quiet, and we simply can’t. That protects everyone, including you.
This is just one of roughly 80 things to stay on top of when selling a home, and you don’t have to navigate it alone. Give us a call to schedule a free, no-headlock strategy session. We take a consultative approach designed to maximize your sale price while reducing your risk of litigation, lowering your stress, and increasing your net.
Call or text us at 808-799-9596, email us at [email protected], or visit teamlally.com.