Legally speaking: Transactions requiring the ‘Residential Property Disclosure’ form
On June 17, 2013
By Lorie Garland, OAR Assistant Vice President of Legal Services
We were recently asked if the disclosure form is required in a lease with an option to purchase transaction? The answer is yes.
The form is required in a transfer of residential real property by any of the following methods:
- Land installment contract;
- Lease with option to purchase; or
- Lease for a term of ninety-nine years and renewable forever.
A transfer occurs when the initial contract for transfer is executed regardless of when legal title is transferred. Therefore, in a lease with an option to purchase transaction, the form would be required to be provided to the lessee prior to execution of the lease option contract.
NOTE: OAR developed two new tools to assist REALTORS in identifying transactions that are exempt from the requirement of using the disclosure form. Click here to access the optional form and chart.