The sellers should physically fill out the Sellers Disclosure of Property

The sellers should physically fill out the sellers

This preview shows page 23 - 25 out of 32 pages.

The sellers should physically fill out the Seller’s Disclosure of PropertyCondition themselves. It should be updated to reflect the results of anyproperty inspections during the course of the listing agreement. It is important to note that the Seller’s Disclosure of Property Condition isnotan addendum to the contract. In addition, the disclosure reflects theseller’s opinionof the property condition and not the actual condition ofthe property. The buyers should satisfy themselves as to the actualcondition of the property through the use of a licensed Property Inspector. The form’s failures as promulgated by TREC include lack of informationon insurance claims, and no notification of violent death on the property,unusual occurrences, and other stigma that many buyers may wish toknow prior to purchasing the property. Many companies and associationshave published their own Seller’s Disclosure forms for use by theirassociates or members. Transactions Exempt by Statute from Providing the Seller’s Disclosure of Property Condition By court order or foreclosure By or between mortgage holders From co-owner to co-owner By will, executors, guardianships, or trusts Where the value of the dwelling does not exceed 5% of the totalpurchase price To or from governmental agencies By trustee in bankruptcy Real Estate Owned (REO) by banks New home sales Between divorcing spouses From spouse to spouse TRELA only mandates the disclosure of death on the property if the deathwas due to the property’s condition. It does not address any otherdeathrelated situations. ____________________________________________________________ Unit 11: Contingencies, Amendments, and Addenda 423
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A licensee should be aware of the possibility of undisclosed latent defects.Latent defectsare hidden defects not necessarily evident upon inspection.Examples of Latent Defects Foundation problems Wood destroying insects Flood plains Roof leaks External influences, e.g., underground storage tanks, poordrainage, industrial pollution, etc. Lead-Based Paint Addendum The Residential Lead-Based Paint Hazard Reduction Act of 1992mandates that a lead-hazard information brochure and disclosure formmust be provided to a buyer by a seller. In addition, the presence of anyknown lead-based paint must be disclosed. The Addendum for Seller’s Disclosure of Information on Lead-BasedPaint and Lead-Based Paint Hazardsas Required by Federal Law, orsimply, the Lead-Based Paint Addendum, pertains to residential housingwith four or fewer units. The Act requires that this addendum or a similaraddendum accompany any purchase contracts orleases on residentialproperty built before 1978. This became mandatory for single familydwellings on December 1, 1996 and for multi-family dwellings onSeptember 1, 1996. Some pre-1978 properties, called target housing, areexempt from the disclosure.
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