A material fact is a crucial piece of information about a property that could significantly impact a prospective tenant's decision to rent it. These facts are typically related to the property's condition, safety, or legal status. It's essential to disclose material facts to prospective tenants to ensure transparency, maintain ethical standards, and comply with the law. The most common issue disclosed is lead-based paint.
As a licensed property manager in the state of North Carolina, we are required to disclose any and all material facts.
Here are some general examples of material facts and how they should be applied when dealing with prospective tenants:
Safety Concerns: If the property has a history of safety issues, such as structural problems, you must inform prospective tenants. This helps them make an informed decision about their safety.
Environmental Hazards: If there are known environmental hazards in the area, such as flooding or proximity to industrial facilities, if the home was formerly used as a meth lab, and lead-based paint, tenants should be made aware. This information is crucial for their well-being.
Zoning and Future Construction: In addition to potential flooding, it's important to inform tenants about any known zoning considerations or future construction projects in the area.
Legal Issues: Any ongoing legal disputes related to the property, such as zoning disputes, foreclosures, short sales must be disclosed. Prospective tenants need to know if the property's legal status could affect their tenancy.
Pest Problems: If the property has a history of pest infestations, it's important to inform tenants. This allows them to take necessary precautions and make an informed choice.
Property Condition: Significant issues with the property's condition, such as a leaking roof or faulty plumbing, should be disclosed. Tenants have the right to know about potential maintenance issues.
However, Death, illness, or conviction of certain crimes are not a material facts. § 39-50.
When applying this information to prospective tenants, ensure that you provide these disclosures in writing, typically in the form of a property condition report or a lease agreement addendum. Be transparent and ready to answer any questions they may have. It’s especially harmful if it’s a “hidden” defect that doesn’t come to light until later.
Additional examples include but are not limited to:
The backyard floods when it rains. This is a material fact.
The property is located in a neighborhood with restrictive covenants. This is a material fact.
The property has been previously occupied by a pet. This is a material fact. The property has a different zip code than the city it is located in (ex. Mint Hill zip code, but the property is located within the city limits of Charlotte). This is a material fact.
The ceiling has stains on it from a current leak. This is a material fact.
Remember, providing material facts not only builds trust with tenants but also helps protect you from potential legal issues in the future. It's a professional and ethical practice that aligns with your role in in renting your property. *Note, in NC if you are a licensed broker, you must disclose any and all material facts.
Transparency is key in helping tenants make informed decisions about renting the property.
