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OAR Legal Hotline FAQs: Ohio’s Property Disclosure Form

By Peg Ritenour, OAR Vice President of Legal Services/Administration

The Legal Hotline often receives questions regarding Ohio’s Residential Property Disclosure form. What transactions are covered under Ohio law? When it should be presented to avoid giving the buyer a right to rescind the contract? Who should fill  out the form? Below are a sampling of questions addressing some of these issues.

Q: I have a mobile home listed for sale. Does the seller have to fill out a seller disclosure form?

A: If the seller will only be conveying title to the mobile home, the transaction would not be covered by the property disclosure law and no form would be necessary. However, if the mobile home has been affixed to the land and the land itself will be transferred, then the seller would be required to provide prospective purchasers with a form.

Q: I have a property listed that is zoned for commercial use and has retail space on the first floor. On the second floor there are two apartments. Does the seller have to fill out a disclosure form?

A: Yes. Ohio law provides that a form must be given to any prospective purchaser of “residential real property.” Although this property may be zoned for commercial use, how the property is zoned is not determinant of whether a form is required. Instead, whether a form is necessary will depend upon whether the property falls under the definition of residential real property. Residential property is defined as “real property that is improved by a building or other structure with one to four dwelling units.” Because this building has two dwelling units it falls under this definition, even though it is zoned for commercial use and contains retail space.

Q: I have managed a property for several years. The owner, who lives out of state, is now going to list it for sale with me. Since I know much more about the condition of the property than the owner does, can I fill out the form for the owner?

A: The statute clearly provides that the owner of the property is the person required to complete the residential property disclosure form and provide it to the buyer. Therefore, it is necessary that the owner fill out the form that is provided to purchasers. Although you should not fill out a form, it is important to note that as the listing agent you still have a duty to disclose to potential purchasers any latent defects of which you have knowledge. Moreover, you should inform the property owner about your knowledge of the condition of the property and any defects or repairs so that the seller can make proper disclosure on the form.

Q: I have property listed for sale that is owned by an elderly woman in a nursing home. Her niece has power of attorney to sign all documents regarding the sale. Who should fill out the seller disclosure form?

A: The intent of the seller disclosure law is that the owner of the property complete and sign the form. However, if this is not possible, the niece, by virtue of having a power of attorney, could fill it out based upon whatever knowledge she may have of the condition of the property.

Q: Occasionally when a very desirable property goes on the market offers are received almost immediately. When this happens there may not be time to get a disclosure form from the seller without the risk of losing the property to another buyer. In this situation, is it advisable to make the contract contingent upon the seller providing the buyer with a form within three days of acceptance?

A: In this situation such a contingency can be advantageous to the buyer, but is not in the best interest of the seller. This is because the statute provides that if a buyer receives the disclosure form after entering into a purchase contract, the buyer will have three business days from the date he receives the form to rescind the transaction. Therefore, if such a contingency were included in an offer that the seller accepts, the buyer would have three business days after he received the disclosure form to rescind. This is clearly beneficial to the buyer but contrary to the seller’s best interests. Therefore, while a buyer’s agent may recommend this to his client, a listing agent should advise their seller about the consequences of providing the form to the buyer after a contract has been entered into and suggest that to avoid such rescission rights, that the buyer be provided with the form prior to contract.

Q: I have a farm listed that has a house on it. Does the seller need to fill out a disclosure form?

A: The requirement applies to any property that is improved by a building or any other structure that has one-to-four dwelling units. Because this farm has a house on it, a disclosure form would be needed.

Q: Are investors who have never lived in a property exempt from the requirements of the seller disclosure law?

A: No, there is no exemption for investors, regardless of whether they have ever lived in the property. Therefore, even though an owner has never lived in the property, the investor is still required to provide a Residential Property Disclosure form to the buyer. Of course if an investor has no actual knowledge of the property’s condition he may answer accordingly on the form, as long as he is acting in good faith.

Q: A buyer is entering into a lease with an option to purchase. Is the seller required to provide the buyer with a disclosure form now or when the option is exercised?

A: The disclosure law applies to any transfer of residential real estate, including leases with an option to purchase. Therefore the form must be provided to the tenant/optionee before the contract to lease with an option to purchase is entered into to avoid the right of rescission.

For more information about the Ohio residential Property Disclosure form, click here.

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