Jim Valentine: What is being disclosed
In our litigious society it has become necessary to include many pages of disclosures and disclaimers in our residential property contracts. The contract has gone from one page when I started selling real estate to a minimum of 45 pages today. It is easy to look at it all and just sign the page without looking at details.
Details in a disclosure can loom large if you find yourself in a legal situation. The Seller’s Real Property Disclosure, SRPD, for instance, is completed by the seller, NOT their agent, based on the following question that is presented at the top of the form, “Are you aware of any problems and/or defects with any of the following:.”
If a seller does not disclose what they did, in fact, know they can be sued and end up paying three times the actual damage amount.
So what do they know? Our long time mantra has been, “When in doubt disclose.” It is easier to talk about something up front and explain why it may, or may not, be an issue than to explain after it becomes a serious matter for a buyer. Some items in the SRPD can be confusing. For instance, Item 2.(a) – Any of the improvements being located on unstable or expansive soil? There are areas with clay soil in the region, but often that isn’t thought of when a seller is completing the form. It is important that a buyer review the Disclosure, but not rely on it for their entire study of the property. Do your own investigation. Is the clay in your area a problem, or simply there but not an issue?
On page 2 of the SRPD, Item 2(f) Any encroachments, easements, zoning violations or nonconforming uses? This can get interesting for just about every subdivision done in the last 50 years has easements on the boundary line. Technically, then, this is a “yes” answer that needs explanation. Yes answers are what most people look for on the SRPD, but if you don’t read it carefully a missed box check can be missed. It isn’t a yes, but it isn’t a no and you should know if it was an oversight or if they didn’t want to answer the question.
Often the Duties Owed by a Nevada Real Estate Licensee agency disclosure is reviewed quickly by the parties, including the Agent, but there are some big obligations contained therein including the following broad reaching responsibility: “A Nevada real estate licensee shall: 3. Disclose to each party to the real estate transaction as soon as practicable: a. Any material and relevant facts, data or information which licensee knows, or with reasonable care and diligence the licensee should know, about the property.” Knows or should know – wow! Again, not a problem until there is a problem.
Flood plain maps can change so there is a Flood Disclosure for you to sign. Wire fraud is becoming prevalent resulting in a disclosure. If the property is near open range there is a disclosure. Some counties have right to farm laws that aren’t familiar to transplants from other areas thus you have a … disclosure. Some real estate companies have disclosures for vendor relations, or to distance themselves from litigation. Mold, radon, pets, insurance all have disclosures. There is even a disclosure of the disclosures required by the State of Nevada.
Our Advice: Be diligent when you prepare or review disclosures. Without issues you won’t have a problem, but if something goes awry the documents can become very important when they are six feet tall in a court room being viewed by a jury of your peers. No matter how anxious you are to buy or sell, don’t expose yourself to legal liability in your zeal to make a deal. Make sure that you are buying what you bargained for, review the disclosures and ask questions. Your Agent can likely answer many of them, but only the Seller can tell you the details of the property with certainty and accountability.
Disclosures are important. Don’t trivialize the forms when you see them.
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