Sandra is selling her beachfront home in Rehoboth Beach, Sussex County, Delaware. The property sits adjacent to tidal wetlands. Sandra is aware that a portion of her rear yard was identified as regulated tidal wetland in a state survey conducted five years ago, which restricts any grading, filling, or construction in that area. Sandra does not disclose this restriction on her disclosure form, reasoning that it is a matter of public record and the buyer's agent can discover it through due diligence. The buyer closes on the property and later discovers the wetlands restriction prevents the deck expansion he planned. Which of the following most accurately describes Sandra's disclosure obligation and potential liability under Delaware law?
Correct Answer
A) Sandra was required to disclose the known wetlands restriction as a material fact affecting the property's use and value, and her failure to do so may expose her to liability for damages or rescission regardless of the restriction's public record status
Under the Delaware Residential Real Property Disclosure Act (6 Del. C. § 2570 et seq.) and Delaware's public trust and environmental disclosure principles, a seller must disclose known material facts that affect the property's use, value, or marketability — including known governmental or environmental use restrictions such as tidal wetlands designations. The fact that a restriction is theoretically discoverable in public records does not eliminate the seller's duty to disclose what she personally knows. Sandra had actual knowledge of the wetlands restriction from the state survey, and that restriction materially affects the buyer's ability to use the property as intended. Her failure to disclose creates exposure to civil liability for damages or contract rescission. Delaware's Wetlands Act (7 Del. C. Chapter 66) and the Coastal Zone Act further underscore the significance of environmental restrictions on coastal properties, and licensees and sellers in Delaware's beach communities must be especially attentive to these disclosure obligations.
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Related Concepts
Death on property disclosure addresses whether sellers must inform buyers about deaths that occurred on the property, including natural deaths, suicides, and murders. Requirements vary significantly by state.
Environmental hazards disclosure involves informing buyers about environmental contamination or hazards affecting or potentially affecting a property, including underground storage tanks, contaminated soil, hazardous waste, and proximity to Superfund sites.
Flood zone disclosure requires informing buyers whether a property is located in a designated flood zone as mapped by FEMA. Properties in high-risk flood zones may require mandatory flood insurance.
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