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OFFICIAL MAGAZINE OF THE NATIONAL ASSOCIATION OF REALTORS®



  SALES MEETING TOOL KIT: PROPERTY DISCLOSURE
 

Component 1: Facilitator Talking Points

Component 2: Property Disclosure Agenda

Component 3: Handout 1, What Is Liability

Component 4: Activity 1, Recognizing Improper Disclosure

Component 5: Activity 1, Explanations for Disclosure Scenarios

Component 6: Handout 2, Tips for Reducing Your Risks

Component 7. Handout 3, Disclosure Primer and Your Company’s Property Disclosure Form

Component 8: Activity 2, Identifying Defect Red Flags

Component 9: Activity 2, Answers to Red Flags

Component 10: Activity 3: Lead Out Quiz

Component 11: Activity 3, Answers to Lead Quiz

Component 12: Handout 4, A summary of your state’s disclosure requirements under Megan’s Law

Other Resources		   Component 5: Activity 1, Explanation to Disclosure Scenarios

Explanation to Scenario One: If you see evidence of possible water damage and do nothing, you may be acting negligently. Rae would fail to exercise reasonable care in finding out information about the property if she ignored the water stains. Her professional expertise puts her in a position where she should recognize the stains as an indication of a potential problem. Rae should first question Bob further, to ensure that he is not purposely withholding information. Next, she should suggest that Bob hire an expert to inspect the basement for potential problems. Finally, Rae must disclose the presence of the watermarks to buyers, share the results of any inspection that Bob has had done, and suggest that the buyers consider having an expert inspect the basement before the sale, if Bob chose to do nothing.

Explanation to Scenario Two: Overall, Oliver limited his liability by telling Laurel that he was not an asbestos expert and that he was not sure he could identify asbestos, which was outside of the scope of his professional knowledge. Oliver could have incurred liability if he had told Laurel that he was sure that the substance was not asbestos. Stating that he had read that asbestos was only dangerous when crumbling, or friable, provided information, but would probably not cause Oliver to be liable so long as his statement was clearly expressed as an opinion rather than stated as an established, objective fact.

Explanation to Scenario Three: Even though a stigmatized property may have no physical problems, an event such as a murder at the home might have a psychological impact on buyers’ willingness to purchase a home or on the price they would be willing to pay. Therefore, property stigmas should be disclosed to avoid misrepresentation unless state law prohibits such a disclosure. The exception to this rule is persons with AIDS or who are HIV positive. These individuals are protected under the federal Fair Housing Laws, and the U.S. Department of Housing and Urban Development has advised that it views it to be illegal to disclose that the current or former occupant of a home had AIDS.

Component 6, Property Disclosure >

Note: This information provides general legal information and should not be relied upon as legal guidance. Before acting, both the relevant laws and legal counsel should be consulted. This information should not be construed as specific legal advice nor as an opinion on particular facts, cases, or situations.