Jim Valentine: Filling out the seller’s real property disclosure form
Nevada law requires that the seller of residential real estate completes a form that complies with the regulations adopted pursuant to NRS 113.120. The form consists of two pages of declarations, acknowledging problems and/or defects with the items on the list, a page to provide explanations of acknowledged problems and/or defects, and two pages of the law illustrating what is required, who is required to or exempt from completing the form and the penalties for noncompliance.
It is important to understand that the “…statement is to disclose information known by the Seller which materially affects the value of the property.” That is a very subjective statement, and because it is we feel it is important for a seller to disclose what they know without attempting to determine if there is a potential value affect. There are many things that impact one person negatively and not resonate at all with others. Don’t judge whether or not a statement should be made; you are either aware of problems and/or defects, or not.
Failure to provide a signed disclosure statement can enable a buyer to terminate an otherwise binding purchase agreement and seek other remedies as provided by the law, NRS 113.150. The offer and acceptance forms used by most agents in Northern Nevada were changed recently to read as follows: SELLER shall provide BUYER, at time of written acceptance, a completed SRPD which, by this reference, shall be incorporated into this Agreement. BUYER shall return an acknowledged copy to SELLER or terminate this Agreement, in writing, within four (4) business days of receipt. SELLER is required to disclose any new defects between the time the SRPD is executed and COE. Note the timing.
The form only provides notice of potential issues. It is clear about the extent of the disclosure where it says: Unless otherwise advised, the seller does not possess any expertise in construction, architecture, engineering or any other specific area related to the construction or condition of the improvements on the property or the land. Also, unless otherwise advised, the seller has not conducted any inspection of generally inaccessible areas such as the foundation or roof. This statement is not a warranty of any kind by the seller or by any agent representing the seller in this transaction and is not a substitute for any inspections or warranties the buyer might wish to obtain. Systems and appliances addressed on this form by the seller are not part of the contractual agreement as to the inclusion of any system or appliance as part of the binding agreement.
More to remember: “NRS 113.130 does not require a Seller to disclose a defect…of which he is not aware.” “A completed disclosure form does not constitute an express or implied warranty regarding any condition…”
“Neither this chapter or Chapter 645 of NRS relieves a Buyer …of the duty to exercise reasonable care to protect himself.” It is clear that this is only a disclosure of what a buyer knows. Get all pertinent inspections to protect yourself. There can be a lot of issues that are truly unknown to a seller, especially a non-occupier.
Our advice: In addition to the SRPD, there can be other property condition disclosures that you will encounter in your transaction. Read all disclosures. It is exceptionally frustrating to discover a surprise at the end of an escrow that was actually disclosed in the SRPD or other disclosure and not acted on. It is an easy area to get lax on during an escrow, but there can be serious consequences. Be sure to pay close attention to this component of your transaction. It is best to find out about problems before you close escrow rather than to chase a Seller for restitution after he has his money and leaves town.
Disclosure is important in real estate, whether a buyer or seller. Both are protected when the documents are completed in good faith and delivered in a timely manner. Things happen, proper execution of the SRPD protocols is essential for all.
When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Jim Valentine, RE/MAX Realty Affiliates, 775-781-3704. firstname.lastname@example.org.