Mandatory Disclosures Required
With ever increasing mandatory disclosure obligations being placed
on sellers of real estate, it can be difficult to keep-up with new
requirements. Below is a summary of disclosures required in residential
transactions (1-4) units. Many of these disclosures are required
on commercial transactions also. Local residential disclosures may
exist also, therefore it is always prudent to inquire about such
requirements before escrow closes.
TDS (Transfer Disclosure Statement)
The law requires a seller to provide prospective buyers with a written
disclosure statement covering such items as appliances, structural
defects and modifications, possible easements, neighborhood problems
and other material fact that may affect the principal's decision
in a transaction.
Natural Hazards Disclosure Law
The Natural Hazards Disclosure law requires the seller or seller's
agent to disclose whether the property is located in the following
Flood Hazard Zones
Areas subject to unusual flood risks
Areas subject to potential flooding in the event of a dam failure.
Very High Fire Hazard Severity Zones
Areas where property owners may be obligated to undertake specific
Wildland Fire Areas
Areas wherein the state has responsibility for fire suppression
Lead Paint Disclosures
The law requires both sellers and lessors to disclose known lead
hazards by providing an informational booklet and a disclosure form
as addenda to the purchase contract or lease. The federal lead paint
disclosures apply to leases and sales of residential property, including
mobile homes, constructed before 1978.
Megan's Law was enacted to notify buyers and tenants about the proximity
of registered offenders. The law requires every purchase contract
and lease agreement to contain a specific written notice that a
database containing information about registered sex offenders may
be accessed by buyers and tenants. This disclosure is required for
every lease or real property sales contract for residential real
property entered into on or after July 1, 1999.
Disclosures involving the location and proximity of any military
Known Hazardous Substances on the Property
State law requires that disclosure of known environmental contamination
or hazards on a subject property be made to prospective Buyers.
Environmental contamination could be a private underground fuel
or heating oil tank that has leaked.
Neighborhood Environmental Contamination
The potential for hazardous substance contaminated sites in the
vicinity of residential property could be anything from a local
gasoline station with a leaking underground fuel tank to an industrial
site. Disclosing the environmental information that is reasonably
available today acknowledges that buyers may have questions over
the uncertainties environmental contamination issues present.
Real estate agents and sellers are being held to ever
more stringent and higher standards of care. The number one claim
on Errors & Omissions Insurance is "failure to disclose"
some item that a Buyer felt was material. Although there is no way
to completely prevent law suits, there are some general guidelines
to help protect against non-disclosure liability.
Make all disclosures in writing and obtain acknowledgment signatures.
If there is any doubt, don't wait for the Buyer to
ask - disclose, disclose, disclose.
Disclosure Report Providers
ID Disclosure Reports
here to find out what homes are listed for sale in the Englewood
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