A Review of the Residential Property Disclosure Statement

       I know we are all familar with the Residential Property Disclsoure Statement; however, I thought it would be useful to go over some lesser known rules regarding the form.  First, there are a number of exempt transfers such as the following: foreclosure sales, REO sales, sales from fiduciaries such as executors and trustees, sales of newly constructed dwellings, and sales when both parties waive the requirement.

           Second, regarding the statement, a broker's duty is to inform a client of his or her rights and obligations in providing the statement.  A broker is not liable for a seller's refusal to provide a statement if the broker notifies the seller of his or her obligation to do so.  A broker's independent duty to disclose material facts regarding the property is not altered or affected by a seller's compliance or non-compliance.

        Third, a seller is not liable for money damages for failing to provide a disclosure statement.  A buyer's sole remedy is to cancel the contract within three days of the earlier of receipt of the statement or the contract date.  Any information on a disclosure statement would certainly be evidence in a lawsuit alleging seller fraud.

     This newsletter concludes my series on issues of disclosure.  Beginning in September, I will address various challenging contracting situations such as short sales, REO sales, sales from estates, and sales of new construction.