Residential Property Disclosure Form Q&A
(eConnections Week of October 29, 2012)
by Lorie Garland, VP Legal Services
Earlier this month, it was announced that the Ohio Division of Real Estate and Professional Licensing has made changes to the Ohio Residential Property Disclosure Form. OAR has received numerous questions from Realtors about the new form and when it can be used. (The formatting issues in the form have been corrected.) Below are some of the most commonly asked questions.
Q1: What is the effective date of the new Residential Property Disclosure Form (RPDF)?
A1: January 1, 2013
Q2: What are the more significant changes to the 2013 RPDF?
A2: As a result of formatting changes and additional questions to the RDFP, the 2013 form is five pages long. The 2013 RPDF covers all topics addressed in the previous version along with a few new additional sections. The new areas addressed in the 2013 RPDF include:
- A question regarding any oil, gas or mineral right leases on the property and a statement directing the purchaser to the recorder’s office in the county where the property is located to obtain further information on this issue.
- Expands on the question regarding assessments on the property to also include fees or abatements.
- Expands on the question regarding whether the property is part of a homeowner’s association to include SIDs (Special Improvement District), CIDs (Community Improvement District) and LIDs (Local Improvement District).
- Provides the purchaser with information on abandoned underground mines and directs purchasers to the Ohio Department of Natural Resources for additional information.
Q3: If I list a home this fall, what version of the RPDF should the sellers complete?
A3: You should discuss with the sellers that a new RPDF becomes effective on January 1st. The sellers will have to decide whether they want to complete the 2013 RPDF even though that is not mandatory on properties listed in 2012. Certainly, any questions the sellers have regarding completion of the form or whether to use the 2013 RPDF early should be referred to the seller’s own legal counsel.
Q4: I listed a home in September at which time the sellers completed the current RPDF. If the property is still on the market after January 1, 2013, must the sellers complete the 2013 RPDF?
A4: The Ohio Division of Real Estate and Professional Licensing has indicated that it will not charge a licensee with a license law violation for failing to have the sellers complete the new RPDF in this situation. However, to avoid any potential civil liability for you and the sellers, it is strongly recommended that the sellers complete and provide the 2013 RPDF to buyers on any purchase contract that is entered into after January 1st. This will ensure that the buyer is receiving information on the topics that are covered in the new version of the form.
Q5: I have a listing which went into contract in 2012. The sellers provided the buyers with the 2012 RPDF. The transaction will not close until January 15, 2013. Do the sellers have to provide the buyers with a completed 2013 RPDF because the transaction is going to close in 2013?
A5: No. The residential property disclosure law requires the seller to provide the RPDF to a purchaser prior to entering into a contract to purchase. As the contract was entered into in 2012, the seller met this obligation by providing the 2012 version to the buyers. The residential property disclosure law does not require the seller to update the form after the contract even though the form is later changed.
Q6: Two questions in Section L of the 2013 RPDF contain the words “recent or proposed.” One question asks about “any recent or proposed assessments, fees or abatements.” The other question asks about “any recent or proposed rules or regulations of, or the payment of any fees or charges associated with this property, including but not limited to a community association, SID, CID, LID, etc.” Does “recent” mean within the last five years as several other questions on the form are limited to defects or repairs within the past five years?
A6: If the seller has a question regarding the form or how to respond to a question, the seller should be referred to their own legal counsel. Having said this, these questions do not contain a five year limitation. It is recommended that the seller err on the side of caution to ensure that they do not engage in fraud, either by misrepresentation or nondisclosure of material information.
Q7: What are SIDs, LIDs, and CIDs? How will my sellers know if they are subject to such fees?
A7: These acronyms stand for Special Improvement Districts, Local Improvement Districts, and Community Improvement Districts. These districts are generally created for the purpose of funding improvements and services that benefit the district. If your seller isn’t sure if they are paying such fees, they should check their recent property tax bills. Of course, the seller should also be advised to consult with their own attorney for assistance on answering this question.
Q8: Within the Owner’s Statement on the first page of the 2013 RPDF, it provides “The information contained in this disclosure form does not limit the obligation of the owner to disclose an item of information that is required by any other statute or law to be disclosed in the transfer of residential real estate.” Is this referring to the lead-based paint disclosure requirement?
A8: The RPDF covers the most common issues regarding the condition of property; however, there could be other material facts that a seller needs to disclose that are not addressed on the form. The lead-based paint disclosures required by federal law is clearly such an example.
Q9: I understand that the new RPDF is effective on January 1, 2013. Are there any changes that go into effect on January 1st with regard to who has to complete the form, when the form is to be provided to a buyer or a buyer’s right of rescission for not receiving the form?
A9: No. The only change to the residential property disclosure law requirements is the form itself. All other provisions remain the same.
Q10: Why are some of the questions limited to defects or repairs within the past five years and others ask for the seller’s knowledge of a topic covering the entire time they have owned the property?
A10: The topics limited to defects or repairs within the past five years are the same on the 2013 RPDF as previous versions of the form. This time limit was included on many questions due to the concerns about asking sellers to provide information covering the entire time they have owned the property, as sellers who have owned their property for a long time may forget issues that were resolved years ago. Inadvertent nondisclosure in these cases could possibly lead to fraud claims. For this reason, the five year limitation was included on many topics.
However, there were some topics that are of such importance that the Division of Real Estate and Professional Licensing took the position that the seller should provide information regardless of how long ago the issue occurred. These include water intrusion, mold and hazardous materials. For this reason, there is no five year limit with regard to these issues.
Q11: To what extent should I help the seller fill out the disclosure form?
A11: Ohio law does not require that you assist sellers in completing this form. For liability reasons, it is recommended that you do not assist or advise the seller in completing the form. Such liability could be created if the agent incorrectly advised the seller that disclosure is unnecessary or recommends that something be explained in a certain manner and that advice later results in damages to the buyer. To avoid giving the seller the opportunity to blame any non-disclosure or misrepresentation on the agent, it is recommended that the form be left with the seller to fill out alone and that any questions be referred to the seller’s attorney.
OAR is committed to assisting its members with the transition to the 2013 Residential Property Disclosure Form. As new questions arise, they will be addressed by OAR’s Legal Staff in future Q&A articles.