1. Property Disclosures

2. Class Guidelines Turn off cell phones,
PDAs, etc.
Participate Honor Break Time

3. Property Disclosures
Objectives 1. List the types of properties where a property disclosure is required List the exceptions for the use of a property disclosure.

4. Property Disclosures
3. Review the agents duties when the property disclosure is received from the seller/s List the methods of delivery to the buyer/s and analyze the consequences if the buyer does not receive a copy of the form before the offer is written.

5. Property Disclosures
5. Define: patent defect, latent defect, caveat emptor, material fact, and material defect.

6. 5302.30 Property disclosure form required for all residential real property transfers.

7. Any Sale Land installment contract Lease with option to purchase Exchange Lease for a term of ninety-nine years and renewable forever

8. Residential real property means real property that is improved by a building or other structure that has one to four dwelling units.

9. 14 Exceptions
12. A transfer that involves newly constructed residential real property that previously has NOT been inhabited
Number 12. One you are most likely to encounter.
The word “Exceptions” is hyperlinked to a Word document with a summary of the exceptions.
1. A transfer pursuant to court order;
2. A transfer to a mortgagee by a mortgagor by deed in lieu of foreclosure or in satisfaction of the mortgage debt;
3. A transfer to a beneficiary of a deed of trust by a trustor in default;
4. A transfer by a foreclosure sale that follows a default in the satisfaction of an obligation secured by a mortgage;
5. A transfer by a sale under a power of sale following a default in the satisfaction of an obligation that is secured by a deed of trust or another instrument containing a power of sale;
6. A transfer by a mortgagee, or a beneficiary under a deed of trust, who has acquired the residential real property at a sale conducted pursuant to a power of sale under a mortgage or a deed of trust or who has acquired the residential real property by a deed in lieu of foreclosure;
7. A transfer by a fiduciary in the course of the administration of a decedent’s estate, a guardianship, a conservatorship, or a trust;
8. A transfer from one co-owner to one or more other co-owners;
9. A transfer made to the transferor’s spouse or to one or more persons in the lineal line of consanguinity of one or more of the transferors;
(consanguinity means in the blood line)
10. A transfer between spouses or former spouses as a result of a decree of divorce, dissolution of marriage, annulment, or legal separation or as a result of a property settlement agreement incidental to a decree of divorce, dissolution of
marriage, annulment, or legal separation;
11. A transfer to or from the state, a political subdivision of the state, or another governmental entity;
12. A transfer that involves newly constructed residential real property that previously has not been inhabited;
13. A transfer to a transferee who has occupied the property as a personal residence for one or more years immediately prior to the transfer;
14. A transfer from a transferor who both has not occupied the property as a personal residence within one year immediately prior to the transfer and has acquired the property through inheritance or devise.

10. Property Disclosures
Filled out by seller/s To the best of the seller’s knowledge on the date it was signed

11. Are you using the correct form?

12. Suggestions At listing - Give to seller/s

13. Ohio law does NOT prohibit you from filling out the form for the seller. However…

14. Contract Law
Any ambiguity in a contract will be construed against the writer…. Which includes filling in the blanks!

15. Best Business Practice Let the seller/s fill out the form.
(Unless you are the seller.)
Do NOT be present when the seller is filling it out.

16. Your duties when the property disclosure is received from the seller…

17. Is every section filled out?

18. Did the seller initial and date every page?

19. Is the same address across the top of every page?

20. Did the seller sign and date?

21. Delivery to Buyer
If form is 8.5 by 14 be sure the recipient's fax machine has 8.5 x 14 paper or that it is automatically reduced to fit the paper. If it is automatically reduced the question is, can the buyer still read it?

22. Be sure buyers see this paragraph.

24. Always... Have the seller/s fill out and sign the form.
Give a copy to the buyer/s. Keep copies for 3 years.
All owners must sign!

25. What if the seller/s refuses to fill out the form?
1. Note it on a form and keep it with your records Send a letter to the seller/s informing him/her that the law requires the form to be completed.

26. Yes…but the buyer has a right to rescind…
Can I accept the buyer’s offer if the buyer has not received the form?
Yes…but the buyer has a right to rescind…

27. Pursuant to ORC Section 5302
Pursuant to ORC Section (K), if this form is NOT provided to you prior to the time you enter into a purchase contract for the property, you may rescind the purchase contract by delivering a signed and dated document of rescission to Owner or Owner’s agent…

28. Provided the document of rescission is delivered prior to all three of the following dates: 1) the date of closing; 2) 30 days after the Owner accepted your offer; and 3) within 3 business days following your receipt or your agent’s receipt of this form or an amendment of this form.

29. If the condition of the property changes after the seller has completed the form, is the seller required to fill out another form?
Seller “may” amend the form NOT required by law. Recommend the seller see his/her attorney if they refuse to amend.
If the seller does provide an amended form after the contract has been entered into, the buyer will have 3 days to rescind the contract.

30. What is the difference between a latent and patent defect?
Latent – Too late… you found the defect after closing! Hidden defect

31. Patent Defect If you look, you will see it!

32. Define: Caveat Emptor
Buyer Beware! Encourage the buyers to have their own property inspection!

33. Define material defect.
For purposes of this section, material defects would include any non-observable physical condition existing on the property that could be dangerous to anyone occupying the property or any non-observable physical condition that could inhibit a person’s use of the property.
This definition is taken from the property disclosure statement.

34. Define material fact.
This definition is taken from the property disclosure statement.

35. Black’s Law Dictionary
Of having such a nature that knowledge of the item would affect a person’s decision.
This definition is taken from the property disclosure statement.

36. Property Disclosures
Material facts could include… Stigmatized property Sexual offenders Environmental issues Would it affect the party’s decision if they knew?

37. Direct buyers to sexual offenders database www.esorn.ag.state.oh.us.
Megan's Law
Direct buyers to sexual offenders database

38. If you have a question… See your broker or manger!
Property Disclosures
If you have a question…
See your broker or manger!

39. Define imputed knowledge.

40. Black’s Law Dictionary
Knowledge attributed to a given person, especially because of a person’s legal responsibility for another’s conduct.
The broker’s imputed knowledge of the agent’s dealings.
This definition is taken from the property disclosure statement.

41. “If I know, then everyone in the transaction knows!”
If knowledge regarding the property condition changes, just because you know, it doesn’t mean everyone else knows.

42. “If I know, then everyone in the transaction knows!”
Update the property disclosure form, MLS information, websites, flyers, etc.

44. Agents are not expected to be experts, but knowledgeable regarding environmental issues.
Great Environmental Issues PowerPoint presentation at the ODRE website!

45. 10 Minute Break Timer