When selling your home there is a laundry list of things to be done. From pricing to staging to open houses, there is a lot to prepare for. However, an important piece of selling your home is often one that is overlooked, that is the disclosure of any flaws or defects to potential buyers. Not only is it important, but in many states it is legally required.
So what exactly are you suppose to disclose? Most states, including Ohio, require disclosure of any material facts, that is anything that may affect the buyer’s decision or price offer. Some examples of material facts include the age of property components and systems, leaky roof or cracked foundation and information about future developments that might affect the property, such as planned roadways, etc. If you are questioning whether to disclose something, it’s usually safest just to do so. A buyer who proves you knowingly withheld material facts about your property can claim damages suffered or demand price concessions.
Disclosure laws vary from state to state and in some cases you may be legally bound to disclose information about crimes that may have occurred at the property, seismic activity, or notification to buyers about the proximity of a registered sex offender. Check with your Realtor for disclosure requirements specific to your area.
After you have spoken with your Realtor and/or attorney and created a list of disclosures, it is a good idea to put everything down in writing. Most states require the use of special disclosure forms. After reviewing the form, the buyer should acknowledge receipt of the disclosure by signing and dating it at the bottom. It’s a good idea to collect the signed form from the buyer as soon as possible as the purchase contract can be rescinded at anytime up until this occurs and prior to the closing.
The most important thing to consider when disclosing material facts is that anything questionable will more than likely be questioned. It’s a good idea to think about what you would want to know about your new home and use that as a guide for what to disclose to your potential buyers. It’s also not a bad idea to remember that there is the potential of legal recourse for anything you fail to disclose and it’s clear you were aware of.
The Ohio Residential Property Disclosure Law (ORC Section 5302.30) went into effect on July 1, 1993. The current form went into effect in 2013. Buyers are protected because sellers must disclose, in writing, any known defects of the property. On the other hand, sellers are protected because buyers are put on notice as to those disclosed defects, and once disclosed, defects should not be the basis of a post-closing lawsuit.
The Ohio Residential Property Disclosure Form requires the seller to indicate any known problems or defects regarding a variety of features and structural aspects of the home. The original form required information on the water supply, sewer system, roof, basement, structural components, mechanical systems, termites, presence of hazardous materials, drainage, code violations and wells. The new form added boundary lines, encroachments, shared driveway/party walls, flood plain, Lake Erie Coastal Erosion Area, zoning violations/nonconforming uses, assessments, homeowner’s association, historic building district, fire/smoke damage, water intrusion/mold and water quantity. It also added shared well as a source of water supply and built in appliances as a mechanical system. In some cases, the seller must indicate known problems or defects during their ownership. In other cases, the Ohio Department of Commerce has placed a five-year limit on the required disclosures. It is important to read each statement on the form carefully to ensure its meaning is understood.
The form also contains a statement that the owner is not making any representations regarding offsite conditions and that the buyers should exercise their own due diligence to investigate such matters. Information is also included about Megan’s Law and the form also states that the buyer assumes responsibility to check with the sheriff’s office for such information.
While the completion of the form by the current sellers is required, they are only asked to indicate conditions as they know them. The legislation does not require sellers to incur the expense of having a professional inspection done nor are they required to further investigate any aspect of the home mentioned on the form of which they have no actual knowledge. If the sellers do not know about the current condition of any item included on the form, they may so indicate.
Also, there are exclusions to this law. The Ohio Association of REALTORS® has developed a chart that lists the most common transactions on which you need the form and the ones on which you don’t. For complete details on its required use and exclusions, the above link to the O.R.C. can assist. Further, sometimes a seller believes that the form is not required for the real estate. In that event, OAR has an optional form that can be used in lieu of having the seller cross through each page and writing “exempt” on the form, which is a practice many REALTORS® follow. The form that has been developed by OAR for its members’ exclusive use can be accessed by clicking here.
There is no regulatory agency to provide enforcement of this law. Rather, if the sellers do not comply with the requirements of the law, the buyer has the right to rescind the contract. The law requires the seller to present prospective buyers with the completed and signed form as soon as practicable or before an offer to purchase is made. The buyers must acknowledge receipt of the form by returning a signed and dated copy of the form back to the seller.
If you, or someone you know is considering Buying or Selling a Home in Columbus, Ohio please give us a call and we’d be happy to assist you!
The buyer has the right to rescind the contract under the following circumstances: If the buyer makes an offer prior to receiving the form, the buyer has three (3) business days after the date on which the form is received to rescind the purchase contract. However, this rescission right must be exercised within 30 days from the date the Contract to Purchase was entered into or until closing, whichever occurs first. Also, if the seller never provides a disclosure form to a prospective buyer, the buyer has the right to rescind the purchase contract for 30 days from the date the Contract to Purchase was entered into or until closing, whichever comes first. The same rescission rights apply to amended disclosure forms that are provided after the Contract to Purchase has been entered into.
Whether the Property Disclosure Form, or an amended form, is given late or not provided at all, once the transaction closes, no rescission rights exist. In this case, the best course of action for a buyer who discovers a defect in the property which was not disclosed is to contact an attorney.
REALTORS® cannot actually help sellers fill out the form; however, they can answer questions about the form itself and the process. If a seller is unsure as to how a particular section of the form should be completed, it is suggested that he/she seek the advice of legal counsel.
If you, or someone you know is considering Buying or Selling a Home in Columbus, Ohio please give us a call and we’d be happy to assist you!
The Opland Group Specializes in Real Estate Sales, Luxury Home Sales, Short Sales in; Bexley 43209 Columbus 43201 43206 43214 43215 Delaware 43015 Downtown Dublin 43016 43017 Gahanna 43219 43230 Grandview Heights 43212 Galena 43021 Hilliard 43026 Lewis Center 43035 New Albany 43054 Pickerington 43147 Polaris Powell 43065 Upper Arlington 43220 43221 Westerville 43081 43082 Worthington 43235
