CH 11 CONTINGENCIES, AMENDMENTS, and ADDENDA.pdf.docx

The sellers should physically fill out the sellers

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The sellers should physically fill out the Seller’s Disclosure of Property Condition themselves. It should be updated to reflect the results of any property inspections during the course of the listing agreement. It is important to note that the Seller’s Disclosure of Property Condition is not an addendum to the contract. In addition, the disclosure reflects the seller’s opinion of the property condition and not the actual condition of the property. The buyers should satisfy themselves as to the actual condition of the property through the use of a licensed Property Inspector. The form’s failures as promulgated by TREC include lack of information on insurance claims, and no notification of violent death on the property, unusual occurrences, and other stigma that many buyers may wish to know prior to purchasing the property. Many companies and associations have published their own Seller’s Disclosure forms for use by their associates 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 total purchase 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 death was due to the property’s condition. It does not address any other deathrelated 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 defects are 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, poor drainage, industrial pollution, etc. Lead-Based Paint Addendum The Residential Lead-Based Paint Hazard Reduction Act of 1992 mandates that a lead-hazard information brochure and disclosure form must be provided to a buyer by a seller. In addition, the presence of any known lead-based paint must be disclosed. The Addendum for Seller’s Disclosure of Information on Lead-Based Paint and Lead-Based Paint Hazards as Required by Federal Law, or simply, the Lead-Based Paint Addendum, pertains to residential housing with four or fewer units. The Act requires that this addendum or a similar addendum accompany any purchase contracts or leases on residential property built before 1978. This became mandatory for single family dwellings on December 1, 1996 and for multi-family dwellings on September 1, 1996. Some pre-1978 properties, called target housing, are exempt from the disclosure.
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  • Fall '19
  • Mortgage loan, FHA

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