Seller Disclosure Issues

FAQS: Seller Disclosure Exemptions

Exemptions: Seller Disclosure and Lead-Based Paint

Published by OAR’s Legal Services Group
Summary: The summary of the transactions that are covered by the Ohio Residential Property Disclosure Act and the federal lead-based paint regulations along with the transactions that are exempt under each.

FAQS: Seller Disclosure Real Estate Owned

Brokers can list real estate owned properties

Published by OAR’s Legal Services Group
Summary: As Ohio brokers struggle with the challenges of selling the large inventory of lender-owned properties, a continuing issue has been the point at which brokers can take such listings, place them in the MLS and begin the marketing process.

FAQS: Seller Disclosure Law

Disclosure: Seller Disclosure Law

Published by OAR’s Legal Services Group
Summary: FAQs: Dealing with mobile homes; commercial properties and when the property disclosure law comes into effect.

FAQS: Seller Disclosure Stigmatized Properties

Disclosure: Stigmatized Property

Published by OAR’s Legal Services Group
Summary: FAQ: Learn if an agent must disclose that a murder or suicide took place on a property.

FAQS: Seller Disclosure General FAQs

Disclosure: General FAQs

Published by OAR’s Legal Services Group
Summary: FAQs on environmental disclosure issues; AIDS and disclosing buyer/seller identities and much more. A link to the Seller Disclosure Form is provided.

Exemptions: Seller Disclosure and Lead-Based Paint

The following is a summary of the transactions that are covered by the Ohio Residential Property Disclosure Act and the federal lead-based paint regulations along with the transactions that are exempt under each.

Residential Property Disclosure Form

Covered transactions:
The transfer by sale, land installment contract, lease with option to purchase, exchange, or lease for a term of 99 years and renewable forever of property that is improved by a building or other structure that has one-to-four dwelling units.

  • Excluded transactions
  • Foreclosure sale
  • Transfer pursuant to a court order
  • Transfer to a mortgagee by a mortgagor by deed in lieu of foreclosure
  • Transfer by a mortgagee who has acquired the property by a deed in lieu of foreclosure
  • Transfer by a fiduciary in administrating an estate, guardianship or trust
  • Transfer between co-owners
  • Transfer to the transferor’s spouse
  • Transfer between spouses or former spouses as a result of a divorce
  • Transfer to or from the state or other governmental entity
  • Transfer of newly constructed residential property not previously inhabited
  • Transfer to a transferee who has resided in the property for one or more years immediately prior to the transfer
  • transfer by a transferor who had inherited the property and has not resided in the property for one year prior to the transfer
  • Residential Lead-Based Paint Disclosure Regulations

Covered transactions

The sale or lease of housing construction prior to 1978.

Excluded transactions

  • Foreclosure sale
  • Leasing of rental properties that have been found to be lead-based paint free by a certified inspector
  • Short-term leases of 100 days or less where no lease renewal or extension can occur
  • Lease renewals where lead disclosure has already taken place and no subsequent testing or information as become available
  • Housing for the elderly or disabled, unless a child under the age of six resides, or is expected to reside, in the housing
  • 0-bedroom dwellings where the sleeping area is not separated from the living area.

Brokers can list real estate owned properties

by Peg Ritenour
Vice President
Legal Services

As Ohio brokers struggle with the challenges of selling the large inventory of lender-owned properties, a continuing issue has been the point at which brokers can take such listings, place them in the MLS and begin the marketing process.

The Ohio Division of Real Estate and Professional Licensing has recently clarified this point for REALTORS.

Lenders usually acquire title to foreclosed properties by purchasing them at the sheriff’s sale. Following the auction, the court must confirm the sale. The purpose of this is to confirm that proper procedures were followed. If the sale is confirmed, the court will issue a confirmation order and a sheriff’s deed will be issued.

Unfortunately, this is the point at which the process often gets bogged down. Because of the high volume of sheriff’s sales, it is currently taking several weeks for the sheriff to issue the deed in the lender’s name. However, lenders usually want to list these “REO” properties for sale with a broker and have the broker get them in the MLS as soon as possible.

This has posed a problem for Ohio brokers who have not wanted to run afoul of Ohio license law.

Ohio Revised Code Section 4735.18(A)(20) prohibits a licensee from offering property for sale without the knowledge and consent of the owner or the owner’s authorized agent. Historically, the Division has advised licensees that for purposes of this section it interprets the owner to be the person or entity that is indicated on the deed. Thus, licensees were cautioned that they should not take a listing from a lender on an REO property until the sheriff’s deed is issued in the lender’s name.

Because so many REALTORS are under pressure from lenders to list their properties prior to issuance of the sheriff’s deed, OAR asked the Division to clarify this issue. After researching this issue, the Division has indicated that licensees can list a property after confirmation of the sale by the court, but prior to issuance of the deed.

According to the Division, for their protection licensees listing an REO property should ask the lender for a copy of the order from the court confirming the sale and ordering the sheriff to issue a deed to the lender.

Licensees are also reminded that the fair housing language and logo are required to be included in the listing agreement.

If the lender is using its own listing form, the licensee will need to attach the fair housing language as an addendum.

Also, lenders must be provided with the broker’s Consumer Guide to Agency Relationship before the broker markets or shows the property.

A bill that is currently pending in the Ohio legislature is designed to speed up the process of having the sheriff’s deed issued and recorded.

HB 138 would require confirmation of the sale within 30 days of the sale and recording of the deed within 14 days of payment of the purchase price. This legislation has been passed by the Ohio House and is expected to have been passed by the Senate at the time of publication of this article.

Seller Disclosure Law

Get Seller Disclosure Form
1. 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.

2. 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: Probably. The statute 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 determinative 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. It defines residential property 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 would probably be found to fall under this definition, even though it is zoned for commercial use and contains retail space.

3. A seller has listed three duplexes for sale with me that he is offering for sale as a package. Because there are a total of six units, is this transaction exempt under the property disclosure law?

A: Although these duplexes may be marketed and offered for sale as a package, the answer to this question probably depends upon how title will be transferred. If each duplex has a separate deed and each could be conveyed separately, then the sale of each duplex would probably be found to be a separate transfer. As such, the seller would be required to fill out a disclosure form on each duplex. However, if these three duplexes are situated on one parcel, with title to all of them being conveyed by just one deed, then the transaction would probably be found to be exempt as there are more than four dwelling units.

4. I have been the property manager of 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, 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 seller. Therefore, it is necessary that the owner fill out the form that is provided to purchasers. Although you are not required to fill out a form, as the listing agent you still have a duty to disclose to potential purchasers any latent defects of which you have knowledge.

5. 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: Unfortunately the statute does not provide a specific answer to this question. To meet the intent of the legislation it is preferred 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. Another option would be to have the buyers waive their right to receive the disclosure form and their right to rescind the contract because no form was provided by the seller.

6. 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 the buyer receives the disclosure form after he has entered into a purchase contract, he 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 accepted, 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 buyer’s agents may recommend this to their clients, seller’s agents should advise their seller not to accept such a contingency and to instead provide the buyer with the form prior to contract to avoid these rescission rights.

7. Can a single family home be sold when the seller refuses to complete a seller disclosure form?

A: Yes. A single family home which does not fall within one of exemptions to the seller disclosure form can be sold without completion of a seller disclosure form. However, if the buyer is never provided with a seller disclosure form, the buyer has a right of rescission for 30 days from the date the contract was entered into.

Transactions covered

8. Does the property disclosure law apply to all sellers, including “for-sale-by-owners,” or only to those who have their property listed with REALTORS?

A: The seller disclosure law applies to all sellers of residential property unless they fall under one of the exemptions in the bill.

9. 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.

10. Are investors who have never lived in a property exempt from the requirements of the seller disclosure bill?

A: No. However, 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.

11. Does the law apply to the sale of condominiums?

A: Yes. Condominiums are covered unless the sale falls under one of the listed exclusions in the bill.

12. I have just listed a home that the owner purchased from a builder four months ago. Will this fall under the exemption for “new construction?”

A: No. The exemption for new construction only applies to homes that have not been previously inhabited.

13. I am a licensed auctioneer and REALTOR. Is the seller required to fill out a disclosure form when property is being sold at auction? If so, when does the form have to be given to the buyer?

A: Sales effected by an auction are covered. The law requires the seller to provide the buyer with a form “as soon as practicable.” However, the seller must give the form to the buyer before he is bound by a purchase contract or the buyer will have certain rights to rescind the contract. Because a buyer at auction is legally bound to purchase the property by placing his bid, it is recommended that the disclosure form be provided to those attending the auction before it begins.

14. Is a form required when property is being sold by a “third party” or relocation company?

A: Yes, such sales are covered.

15. 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.

Providing the form: The Seller’s Obligations

16. Can the seller fax the form to the buyer?

A: Yes. The form may be delivered in person, by ordinary or certified mail or by fax.

17. If the seller is a corporation, who signs the form?

A: In this situation, the person authorized to act on behalf of the corporation in the sale of its property would sign the disclosure form on its behalf. This would normally be the same person who signs the listing, such as an officer of the corporation.

18. If there are several co-owners of a property do they all have to sign the disclosure form?

A: The statute states that “every person” who transfers residential property after July 1, 1993, must provide a disclosure form to a prospective purchaser. Therefore, to comply each person who will be transferring an ownership interest after July 1 (i.e. signing the deed) needs to sign the disclosure form.

19. If the buyer is represented by his own agent, is it sufficient to give the seller disclosure form to his agent?

A: The seller is required to deliver a signed and dated form to the buyer “or his agent.” Therefore, if the selling agent is acting as a true buyer’s agent the seller can give the form to the buyer’s agent to fulfill his obligations. On the other hand, if the selling agent is acting as a subagent he represents the seller and giving the form to him would not constitute delivery of the form to the buyer. The seller’s obligations would only be satisfied when the subagent actually gives the buyer the form.

20. A relocation or “third party” company is handling the sale of property for an employee who was transferred out of town. Does this company fill out the form or does the employee?

A: The answer to this question depends upon who has legal title to the property. If the property is still in the employee’s name and the employee will actually be conveying the deed to the purchaser, then the employee is required to complete the form and provide it to the purchaser. On the other hand, if the title has been conveyed to the relocation or “third party” company by the employee, then that company is required to fill out and provide a disclosure form to the purchaser.

21. Do I have to give each buyer a form with the seller’s original signature or is a copy sufficient?

A: The statute provides that a copy may be given to a prospective purchaser. Therefore an original signature is not necessary on each form delivered to prospective buyers.

22. For his protection, should a seller have an inspection done before filling out the form?

A: It was not the intent of this legislation to require sellers to incur the expense of having a professional inspection done. Instead, the law merely requires that the seller provide the buyer with information regarding the condition of his property that is within his actual knowledge.

23. Does the seller have to disclose problems that occurred a long time ago and that have been repaired?

A: Although the statute does not include any time limit on how far back the seller has to go in his disclosures the mandatory form approved by the Ohio Department of Commerce does, in many places, place a five-year limit on the required disclosures.

24. If the condition of the property changes after the seller has filled out the disclosure form and given it to the buyer, is he required to fill out a new form?

A: The statute states the seller “may” amend the disclosure form in this situation. It does not require the seller to do this. However, it is important to recognize that if the seller does provide a buyer with an amended form after a purchase contract has been entered into the buyer may then have three business days from the date he received the amended form to rescind the contract. For this reason, and because of the seller’s obligation to disclose latent defects, it is strongly recommended that the seller be advised to seek legal advice if he has any questions regarding his duty of disclosure and whether an amended form is necessary.

25. What happens if a buyer writes an offer to purchase before I’ve had a chance to give him the seller disclosure form?

A: To avoid giving the buyer a right to rescind, the seller must provide the disclosure form to the buyer before he is bound by a purchase contract. This can be accomplished by incorporating the disclosure form in a counteroffer back to the purchaser.

26. To avoid the problem described above, should I pass out disclosure forms to everyone attending an open house?

A: This is a practice that some REALTORS follow. If this is done it is crucial to make sure you get a signed and dated copy of the form back from the buyer as proof that the form was provided before a contract was executed.

27. What should I do if the seller refuses to fill out the seller disclosure form?

A: You should refer the seller to his own attorney and note this advice in your file. You might also want to send the seller a letter confirming that he was notified of his legal obligations as further documentation of this advice. Finally, your company might want to consider a policy declining to accept listings unless the seller completes a disclosure form, given the risk of any subsequent transaction being rescinded by the buyer.

The Buyer’s Duties

28. If there is more than one buyer do they each have to be provided with and sign a form?

A: Although that can be done, the statute provides that delivery of the form to one purchaser is considered to be delivery to all of the purchasers unless otherwise agreed. Therefore it is only necessary to give the form to one of the buyers and to obtain one buyer’s signature.

29. Does the seller disclosure form take the place of an inspection contingency in the purchase contract?

A: No. As the disclosure form specifically states, it is not a substitute for inspections and the buyer is still encouraged to obtain his own inspections.

30. What do I do if the buyer refuses to sign the disclosure form?

A: This should be noted in your file, as well as the time and date the form was provided to the purchaser. The seller should be notified at once and any legal concerns either the buyer or seller has should be referred to their respective attorneys.

31. By signing the form does the purchaser waive any rights to sue the seller for concealment, misrepresentation or fraud?

A: No. If the seller engages in concealment, fraud, or misrepresentation in the completion of the form the buyer may still bring an action for damages or other available remedies against the seller even though he signed the disclosure form.

Buyer’s Rescission Rights

32. How does the buyer exercise the right to rescind?

A: The buyer must rescind the contract by delivering written, signed and dated notice that he is rescinding the contract to the seller, the listing agent or his subagent within the appropriate time period as discussed below.

33. Could the buyer ever rescind the contract after the transaction has closed?

A: No. The right to rescind terminates with the closing.

34. Does the buyer have any right to rescind the contract if he receives the disclosure form prior to making an offer?

A: The buyer has no right to rescind the contract if he receives a form in a timely manner. The only exception to this would be if the buyer received an amended form after a contract was executed, or if the seller engaged in fraud in filling out the form.

35. Can a buyer waive the right of rescission?

A: Yes, the statute specifically permits the buyer to waive this right if he receives the form or an amended form after entering into a contract.

36. Is there a time limit or cap on the buyer’s right to rescind in these situations?

A: Yes. When the buyer receives the form, or an amended form, after the purchase contract has been signed, he must rescind the contract within three business days from the date the buyer or his agent received the form. However, this rescission right must be exercised within 30 days from the date the contract was accepted or closing, whichever occurs first. This same “30 days or the date of closing” rule applies when the seller fails completely to provide the buyer with a form.

37. Does that mean if a seller waits until 31 days after the contract is accepted to give a buyer the disclosure form that the buyer has no right to rescind?

A: Yes.

38. If a buyer successfully rescinds a purchase contract, is he entitled to get his earnest money?

A: Generally, yes. The statute provides that upon rescission of the purchase contract the purchaser is entitled to the return of his earnest money and other deposits made in connection with the contract and that the seller “shall return” these monies.

39. In most cases the brokerage firm will be holding the earnest money. Is a release or court order necessary to return the earnest money in this situation?

A: To avoid problems and bring closure to the transaction a release should be obtained. If the seller refuses to permit you to return the earnest money because he is challenging the buyer’s right to rescind, you should maintain the earnest money in your trust account until you receive written permission from the seller or a court order to release it. However, if the seller is not challenging the buyer’s right to rescind, then this fact should be documented and the funds can be returned.

40. When a form is received after a contract is entered into, does the three business days to rescind run from when the buyer receives the form or from when his agent receives the form?

A: Again, this depends on whom the agent represents. If the agent is acting as a true buyer’s agent, the three business days would run from the agent’s receipt of the form. If the agent was acting as a subagent, this time would not begin until the buyer actually received the form.

The Seller Disclosure Form

41. Where can I get copies of the Residential Property Disclosure Form?

A: Forms can be obtained from the Ohio Department of Commerce, Division of Real Estate, by calling (614) 466-4100, or downloaded at its site at:  http://www.com.state.oh.us/real/. If you are a REALTOR, you may contact OAR’s Information Central Service at 1-800-879-4636. Your local Board of REALTORS may also have forms available for your use.

42. Can I put my company name or logo on the form, reduce it in size or change it in any way?

A: According to the Department of Commerce, the form is to be used in the text and format approved by the department. It should not be changed, nor should your company name or logo be added.

43. Does the Division or Real Estate enforce the property disclosure law? If not, how is it enforced?

A: There is no state agency that is responsible for enforcing the seller disclosure law. Instead, the enforcement mechanism is the buyer’s right to rescind the purchase contract if the seller fails to give the buyer a disclosure form or gives it to him after the purchase contract has been signed.

44. As the listing broker do I have to maintain a copy of the disclosure form the seller filled out in my files and, if so, for how long?

A: Under the license law you are required to maintain a copy of all records and documents for three years from the date of the transaction. Therefore, you should not only keep a copy of the form after the seller signs it, but more importantly, maintain a copy of the form with the buyer’s signature after the transaction is entered into. This will document that the buyer was given the form and the date on which it was given.

45. As the selling brokerage, should I maintain a copy of the form received from the seller in my files for three years as well?

A: Yes, the same record keeping requirements apply to you.

REALTORS’ Responsibilities and Liabilities

45. As a listing agent, do I have a duty to tell my seller about his obligations to give the buyer a disclosure form?

A: Although such a duty is not imposed upon listing agents by the statute, an agent’s fiduciary duties to the seller probably create such an obligation. Therefore it is recommmended that you inform your seller about the law and provide them with a disclosure form to complete.

46. To what extent am I responsible for helping the seller fill out the disclosure form?

A: Again, the statute 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 advises 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.

47. Could I be liable to the seller as a listing agent if I fail to give the buyer the disclosure form after the seller fills it out?

A: Possibly. As the seller’s agent, if you assume the responsibility of delivering the form to the buyer and you fail to do so before a purchase contract is executed, the buyer will have certain rights to rescind the purchase contract. If this results in damages to the seller, he may be able to bring an action against the agent and his brokerage firm for failing to assure that the buyer received the disclosure form in a timely manner.

48. What should I do if I believe the seller is intentionally failing to disclose something on the form or misrepresenting the true condition of the property?

A: Certainly an effort to tactfully discuss your concerns with the seller should be attempted. If this fails and you still believe the seller is concealing or misrepresenting the true condition of the property, you should recommend that the seller consult with his attorney, and note this recommendation in you file. Moreover, because you and your firm could possibly have to defend an action for fraud by a buyer if the seller is engaging in concealment or misrepresentation, it is recommended that you decline the listing.

49. As a buyer’s agent do I have a duty to tell the buyer about his right to receive a form from the seller?

A: Although the statute does not require this of you, such a duty is probably imposed upon you because of your agency relationship with the buyer. Therefore, when acting as a buyer’s agent you should inform your client about their rights.

50. As a buyer’s agent, if I receive a disclosure form from the seller, but I fail to give it to the buyer until after a contract is entered into, could I be liable to the buyer?

A: Probably. By giving the form to you, the seller has complied with his duties under Ohio law. Therefore, the buyer will have no right to rescind the contract even though the buyer did not receive the form until after the contract was executed. If certain problems or defects were disclosed on the form, the buyer could probably maintain a cause of action against you for the damages he suffered as a result of your failure to deliver the form to him in a timely manner. These could include the cost to repair the defects and forfeiture of your commission.

Seller Disclosure & Stigmatized Property

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1. Can a REALTOR be held liable for failing to disclose to a buyer that a murder or suicide took place on a property they have listed?

A: In general, a real estate agent has an obligation to disclose any latent defects to the buyer. An agent must also disclose any other fact of which they have knowledge that could be material to the buyer’s decision to purchase the property. In the case of a murder or suicide, this event would probably not effect the physical condition of the property and would not constitute a latent defect. It could, however, be considered to be a material fact to some buyers. Because this could be material to some buyers, to avoid the potential for a claim against both the seller and agent, it may be prudent for an agent to err on the side of caution and to disclose the fact of a murder or suicide to a buyer. The agent should, of course, discuss this issue with the seller and obtain his/her consent before doing so.

Seller Disclosure General FAQs

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1. Is the presence of asbestos a material fact that should be disclosed to potential purchasers?

A: Yes. If the REALTOR is aware of the presence of asbestos in a home, its presence should be disclosed under Ohio’s residential property disclosure law. Although non-friable asbestos does not present a significant health risk, the buyer should be aware of the presence of asbestos in the event that he is considering remodeling or other actions that may disturb the in-place asbestos. If we define materiality as something that impacts the value of property, the fact that additional expenses may be incurred when precautions are taken during remodeling will have some impact on the value of the property.

2. If a REALTOR has knowledge of a high radon gas concentration level in a dwelling, is there a duty to disclose the radon gas concentration level to the buyer?

A: REALTORS who are aware of high radon gas levels in a building and fail to disclose the condition to buyers risk potential liability to buyers for nondisclosure, especially under Ohio’s residential disclosure law which specifically addresses radon. REALTORS as well as sellers have been held liable to buyers for non-disclosure of known hazardous defects and conditions in property in various contexts. Although there are no Ohio court precedents on radon gas yet, courts might conclude that a high radon gas test reading is evidence of a defective or hazardous condition which must be disclosed to buyers.

If a REALTOR has knowledge of a report indicating low radon gas level concentrations, care should be taken in representing this fact to a prospective buyer. Because radon gas levels can vary dramatically based on the type of test, the location the test is taken in the home, and the time of year the test is conducted, a subsequent test could indicate a substantially higher radon gas level.

3. What disclosure requirements exist for a REALTOR concerning the presence and potential hazards of an UST on real property which is being sold?

A: First, Ohio’s residential disclosure law requires the presence of any known USTs to be disclosed to prospective buyers. Yet, unless material facts are present and known by the REALTOR, there probably are no disclosure requirements concerning the potential for soil or ground water contamination for a particular property because REALTORS usually have no expertise in determining whether these hazards exist.

However, if material facts concerning the possibility of contamination are know to the REALTOR, that person has a duty to disclose to the potential buyer of  the property affected. These material facts include information that the REALTOR obtained in making the visual inspection or prior investigation of the real property. The “red flags” indicating possible contamination due to the presence of an underground storage tank include discolored water or soil, or the unusual absence of vegetation.

4. If I am acting as a buyer’s agent, do I have to disclose my client’s identity to the listing agent?

A: No. If the buyer instructs you to keep his identity confidential, as a buyer’s agent, your fiduciary duties of obedience and confidentiality would require you to follow his instructions.

5. There is a group home for mentally retarded adults next door to a home I have listed for sale. Does this need to be disclosed to prospective purchasers?

A: No. Under the federal and Ohio Fair Housing Laws, you may not discriminate against persons with a handicap. Therefore, just as you wouldn’t volunteer information regarding the racial or ethnic composition of the neighborhood, you should not volunteer information regarding mentally handicapped neighbors.

6. Does the seller have to disclose to a potential purchaser that an inspection done in conjunction with a previous contract revealed a defect(s) even if the seller questions the accuracy of that inspection?

A: Yes. The Division of Real Estate has taken the position that negative inspection reports are material facts that must be disclosed to subsequent purchasers. This is true even if other reports contradict those findings or the seller questions their accuracy.

7. A listing agent of a property has learned that the seller’s son, who lives in the property has AIDS. Must he disclose this fact to prospective purchasers?

A: Although this fact may be material to some buyers, both HUD and the Ohio Civil Rights Commission have taken the position that AIDS is a handicap. Under federal and state fair housing laws a REALTOR may not discriminate against persons with a handicap. Therefore, it should not be disclosed that the person living in a property has or did have AIDS. Moreover, ORC Section 3701.244 provides that no person can be held liable for failing to disclose that information to a third person, unless such a disclosure is expressly required by law. And since no such disclosure is currently required by law, a REALTOR cannot be held liable for failing to disclose such information.