Old House Disclosure Statement

[Nate Baumann]

Hi, my name is Nate and I am new to BP and new to rental real estate. I flipped a few homes and have decided to try a longer term approach. I am close to closing on my first deal involving 3 multi-family homes that were built in the 1920's and total 13 apartments. The homes are safe and clean, but have antique railings (wide gaps), some knob and tube wiring, and asbestos based building materials.

I am in the midst of writing my lease agreement and would like people's opinion on the benefits or necessity of adding the following disclosure statement to the Indemnity Section:

"HISTORIC HOME DISCLOSURE - The Owners disclose that the Property was built before modern building codes existed with building practices and materials that were common at the time. The Tenant(s) agrees that they will indemnify, defend and hold the Owner harmless for any damage or injury resulting from building practices or materials that were used in the construction of this Property."

Thank you in advance for your thoughts!

[Toby Bergstrom]

1920's is kind of a new building, I don't think I've owned one that young...

With that said I'm not a lawyer or a building inspector and try not to play one on the internet. 

If there really is a safety risk to the tenants and someone gets hurt I doubt that your disclosure will help you in court or even help you sleep better. 

Regardless of the year built, if you know your property cannot meet the health and sanitary code requirements for a rental unit then you have to fix it. If you are not sure if it meets the code, call the inspector who covers your area and ask for a courtesy inspection. This will let you know what you need to fix and will let the inspector know that you are an upstanding landlord who wants to do the right thing.

I did this on my first rehab --> rent deal just before moving in my tenants and did have to fix a couple of small things, but it established a great relationship with the inspector which lasted over 15 years.