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Seller Disclosure overhaul

by Brougher, Desiree on

The Seller Disclosure Law and the property disclosure statement, also known as PAR Form SPD, generate most of the questions to the legal hotline, and it’s no wonder why!

Disclosure requirements not only come from the Seller Disclosure Law itself, but duties exist in the common law, the State Real Estate Commission regulations and your Realtor® Code of Ethics. The potential for liability abounds and, as always, PAR wants to make sure that we are providing you with the best risk management tools.

Recently, several member volunteers met at PAR headquarters to review common questions and figure out if PAR’s seller’s property disclosure statement needs a remake. A task force, led by Pat Moyer of the Suburban West Realtors® Association, has begun working its way through the form, while trying to strike a balance between information a seller should disclose and a buyer’s obligation to perform due diligence.

All suggested changes to the forms library will go from the task force to the Standard Forms Feedback Panel as early as June. If you have any ideas or suggestions you would like to make to the task force, please send email me.

Topics

Seller’s Property Disclosure Statement Seller's Property Disclosure Form SPD
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Comments (47)

Comments

  • Kathy Bowser    March 18, 2019 | 7:28 am

    Would love to see all the blackened areas removed, this eats an ink cartridge fast not to mention longer fax times. What is the reason for the jet black boxes? Please remove them and put in a more printer friendly pages.
    Also I think there needs to be a section at the bottom of last page to add any updates after inspections or a special addendum for it. So we can redo 1 page and add to the original without writing all over it.

    Reply to Kathy Bowser
    • Michele Frederick    March 18, 2019 | 8:59 am

      Ditto this. Great suggestion!

      Reply to Michele Frederick
    • Desiree Brougher    March 18, 2019 | 10:29 am

      Thank you for your feedback, Kathy. The black boxes are filled in because an answer in the corresponding box would not be an appropriate response to the question. For example, it would not be appropriate to select “unknown” as an answer to the question about whether the seller is the landlord for the property.

      Reply to Desiree Brougher
      • Andrew Wetzel    March 18, 2019 | 12:12 pm

        Instead of a black box where an answer is not appropriate, find a different way to disable the box such as having it show N/A. You could also leave it blank and assume that the seller would know not to use it.

        I would prefer an X but that could be interpreted as an answer.

        Reply to Andrew Wetzel
      • Herb Schwabe    March 18, 2019 | 12:22 pm

        Instead of a solid black block, perhaps use diagonal slash lines in block, which would reduce the ink usage or a simple NA(or something else) in block.

        Also I would like to see a section asking about electronic listening, or recording videos and will they be turned off during showings or open houses(personally I would like them to be ON during open houses).
        Also will they be easily visible to agents and buyers, home inspectors, workmen, or appraisers?
        Security devices will be expanding in homes as they get less expensive and easier to set up.

        Reply to Herb Schwabe
      • Don Warner    March 19, 2019 | 7:40 pm

        Just put a printed “X” in those boxes or eliminate the box entirely.

        Reply to Don Warner
    • Cheryl Miller    March 18, 2019 | 2:00 pm

      Agree.

      Reply to Cheryl Miller
    • Myrtle Bailey    March 18, 2019 | 5:16 pm

      I agree, those black boxes use up ink unnecessarily, leave it blank as a choice

      Reply to Myrtle Bailey
    • Lynne Moskol    March 18, 2019 | 11:16 pm

      There’s an addendum to the disclosure form to use instead of writing on the original. Andcspace to reference the addendum on the last page.

      Reply to Lynne Moskol
  • Tara Andrews    March 18, 2019 | 7:40 am

    The form is good now, however many sellers just check unknown for items with no explanation. Maybe require an explanation of unknown answers as well as yes answers.

    Reply to Tara Andrews
    • Dan Patterson    March 18, 2019 | 8:48 am

      I disagree. Unknown means exactly that, unknown. Sellers are completely disgusted and exasperated by this form. The print keeps getting smaller, with pages added. At this point most agents don’t even understand some of the questions. There’s no room for additional comments. I’m all for inserting a blank page to accommodate explanation. This form has gotten out of control. Put more due diligence on buyers.

      Reply to Dan Patterson
      • Yasmin    March 18, 2019 | 9:04 am

        I have to agree with on this one Dan, I just did a listing yesterday and the seller was perplexed when doing the sellers property disclosure.

        Reply to Yasmin
      • Cherie G Jones    March 18, 2019 | 1:44 pm

        Dan,
        I totally agree with you about the small font in this SPD. None of my Senior Citizen Sellers (or Buyers) can read the print and some of them don’t have relatives to help them. We are not allowed to help them. SO, what are they supposed to do? If I am working with a client that has any vision disabilities this form is totally impossible for them.

        Reply to Cherie G Jones
  • Kim Hillegass    March 18, 2019 | 8:13 am

    Section 16. pg 7 regarding Other equipment and Appliances that will, or may, be sold with the property. Even though it says, in bold print, that the fact that its listed doesn’t mean it’s included, I can’t tell you how many times I’ve still had buyers still think that stuff is staying, even though it’s not in the agreement of sale, just because it’s listed. So why are we listing them at all?

    Reply to Kim Hillegass
    • Dan Patterson    March 18, 2019 | 8:53 am

      Agreed! I just received a contract from a buyer’s agent that states “refer to seller disclosure for list of appliances and other items included in sale “. I asked the agent to strike that since those items aren’t necessarily included. The seller disclosure isn’t a part of the sales agreement. Agent was being lazy.

      Reply to Dan Patterson
    • Ryan Thomas    March 18, 2019 | 3:05 pm

      I’ve been surprised at how many agents I’ve interacted with that didn’t notice the bold print!! The purpose of that section is so the buyer knows if any of those items have defects. For example, if the ice maker isn’t working, then maybe the buyer wouldn’t want the fridge to be included. After-all they are supposed to review the spd before deciding how to proceed with the offer. But, that confusion shouldn’t exist with proper communication from the agent. If you do a good job explaining it and the consumer wasn’t paying attention, it’s still in bold print. It should be clear that any inclusions, conditions or otherwise need to be in the contract itself. I’ve never had a client misunderstand this section.

      Reply to Ryan Thomas
    • Gary Schlectic    March 18, 2019 | 3:05 pm

      Completely agree

      Reply to Gary Schlectic
  • Scott Geller    March 18, 2019 | 8:19 am

    Not every home has the features (like a fireplace) mentioned in the form, but every home I’ve sold has windows and doors, so maybe THEY should be included on the form somewhere besides the “catch-all” in 20(D).

    Reply to Scott Geller
  • Randy Myer    March 18, 2019 | 8:19 am

    There is a form you can use to update disclosure-it’s the sellers property disclosure update

    Reply to Randy Myer
  • Tom Burlington    March 18, 2019 | 8:26 am

    Information about THE POOL!
    Other states have detailed disclosure sections; we have nothing.

    Reply to Tom Burlington
  • Sherry Kenderdine    March 18, 2019 | 8:51 am

    Whether or not there was smoking in the home. I have buyers with health problems exacerbated by going into homes where they’ve smoked. I would equate it to people with pet allergy issues needing to know if there were pets in the home (which is already on the disclosure).

    Reply to Sherry Kenderdine
  • Karen Detwiler    March 18, 2019 | 8:54 am

    Definitely need to add pool information – such as whether it is salt water, or chlorinated; when the liner was replaced (if applicable), when it was last opened or closed (beneficial for vacant properties); size and gallons.

    Reply to Karen Detwiler
  • Marjory K Stawiarski    March 18, 2019 | 9:15 am

    Would be really nice to have more area for explanation or additional comments. Its amazing that a seller answers Yes to a very important question and there are no lines available for an explanation or they just dont write one and I have to call the listing agent and ask for an explanation.
    And take out the blackened areas, doesnt help at all.

    Reply to Marjory K Stawiarski
  • Lisa Moyer    March 18, 2019 | 9:19 am

    I’ve never understood the format of our Seller Disclosure. Would love to see the answer boxes moved to the right side of the page so questions can be viewed first and then the answers.
    Seems like a more logical flow to me. I’ve had many clients comment that the lay-out is so confusing.

    Reply to Lisa Moyer
    • Tiffany Hayward    March 18, 2019 | 11:12 am

      It was previously on the right. It was moved to the left as it is easier to know exactly what answer you are answering yes, no, etc. Visually it is easier.

      Reply to Tiffany Hayward
  • Cyndee Degelman    March 18, 2019 | 9:28 am

    Would love to see an area to ask about solar panels. I recently showed a buyer a house where you could not see the solar panels very well in the exterior front picture because of snow and the solar panels were not mentioned in the disclosure or agent remarks. The listing agent knew nothing about them and had the sellers call me to explain them but when we wanted something in writing from the solar panel company they were not very cooperative in a time sensitive manner.

    Reply to Cyndee Degelman
  • Jamie Cole    March 18, 2019 | 9:38 am

    1. Overloaded questions throughout example: 4b: Was roof replaced, repaired or overlaid during your ownership? if answer is yes and I am there with a buyer looking at a 3 story home…sometimes we can’t tell. When I list, I ask my seller to circle which and provide more details, but its exhausting chasing answers for all of us. 2. Bigger text and is easier to understand. 3. Insurance claims? should this say EVER?? Sellers seem to think this means NOW!

    Reply to Jamie Cole
  • Barbara Taylor    March 18, 2019 | 9:48 am

    The section that pertains to the additions and remodeling. To get the full benefit of what the seller has updated or repaired this section needs to be increased by more lines and wider spaces between each so we can read what the seller has written.

    Reply to Barbara Taylor
  • Jonathan Orens    March 18, 2019 | 9:50 am

    19.C.4. “Are you aware of any hazardous substance or environmental concerns that might impact upon the property?” If there is a Superfund Site or Landfill within a certain proximity to the property, what is to determine how far away one of these has to be to be considered a concern? A superfund site a mile away may be far enough for a seller for it not to be a concern to him or her but too close for a buyer. There was a lawsuit years ago where a buyer sued everyone in the transaction (Sellers, both agents) because the seller didn’t reference anything in 19.C.4 because it was a few miles away. Too close for the buyer obviously. I think 19.C.4 should be removed entirely. I also think that the AOS should have a provision in it that puts the onus on the Buyer to investigate Superfund Sites and landfills – much the same way that the onus is on the Buyer to investigate know sex offenders (Megan’s Law).

    Reply to Jonathan Orens
    • Desiree Brougher    March 18, 2019 | 10:41 am

      I believe you’re referring to Paragraph 19(F), which asks about hazardous substances or environmental concerns. We appreciate your feedback, which I will take back to the task force for consideration, but must point out that that question in particular is required by the regulations of the State Real Estate Commission and cannot be removed from the form.

      Reply to Desiree Brougher
  • Karen Tavenner    March 18, 2019 | 11:26 am

    Please add utility information back on the Sellers Disclosure. Most agents forget to get that information because it used to be on the older version of the Sellers Disclosure.

    Reply to Karen Tavenner
  • Karen Tavenner    March 18, 2019 | 11:26 am

    Please add utility information back on the Sellers Disclosure. Most agents forget to get that information because it used to be on the older version of the Sellers Disclosure.

    Reply to Karen Tavenner
  • Thomas Palmer    March 18, 2019 | 11:43 am

    Can the form be in a digital format, so the Seller(s) may electronically complete the form and check the boxes ahead of the listing appointment. This way the agent/broker can review ahead of time and answer questions, etc. Also more convenient for estates.

    Reply to Thomas Palmer
    • Megan Cellucci    April 1, 2019 | 11:18 am

      Zipforms does have an electronic version – when I import that version to my docusign program, all checkboxes and textboxes are there and are optional, so a seller picks and chooses what is necessary

      Reply to Megan Cellucci
  • Thomas Palmer    March 18, 2019 | 11:58 am

    Meant to say interactive check boxes for the consumer,then if it’s not completed in it’s entirety, it will flag the unanswered check boxes etc in RED, before they can sign it electronically.
    Thank you

    Reply to Thomas Palmer
    • doug byler    March 19, 2019 | 2:51 pm

      YES — allow it to be digitally completed, and have it set up so missed questions are flagged.

      Reply to doug byler
  • Sonja Thompson    March 18, 2019 | 12:01 pm

    Maybe a more detailed explanation of who has to fill out a sellers disclosure I am finding Realtors are telling their sellers they do not need to fill it out for residential investment properties the seller never lived in.

    Reply to Sonja Thompson
  • Leigh    March 18, 2019 | 12:21 pm

    There are several areas in the form asking if sellers have had or currently have issues and they can answer “yes” or “no” but there is no encouragement for seller to explain what happened and what they did about it. This is a big issue anytime I sell a property. I am chasing the agent to find out what the seller had issues with and what was done about it. I feel a written response is in everyone’s best interests vs an agent telling me what they understood the seller to say. Disclosures should allow space and make it clear seller’s need to EXPLAIN any issues they have had and are reporting.

    Reply to Leigh
  • Charles J. Lillicrapp,Jr.    March 18, 2019 | 12:58 pm

    Within the plumbing/sewer section(s) a question about the private wastewater/sewer lateral if it has ever been inspected.

    Reply to Charles J. Lillicrapp,Jr.
  • Kim Reilly    March 18, 2019 | 1:34 pm

    I think a section for insulation should be added. With questions such as areas insulated? What type of insulation? When? I get asked about insulation from many buyers.

    Reply to Kim Reilly
  • Cherie G. Jones    March 18, 2019 | 1:51 pm

    Based on the new situations that both Sellers/Buyers and Real Estate agents are faced with and could be in a situation where an agent could be in a law suit, a section on Cannabis needs to be added. Growing/Using, etc.

    Reply to Cherie G. Jones
  • Brendan Reilly    March 19, 2019 | 10:31 am

    In section #1 (Seller’s Expertise), the Seller should have to disclose if they are an attorney. Sellers have to disclose if they are a real estate licensee. Attorneys have a professional advantage when it comes to the legalities of the wording on documents like the Reply to Inspections. Although agents can and do recommend buyers consult an attorney, most don’t. If they had knowledge the Seller is an attorney more buyers may opt for attorney representation. It levels the playing field, would greatly assist agents when advising buyer clients, and eliminate issues that lead to lawsuits.

    Reply to Brendan Reilly
    • John Beierle    March 23, 2019 | 8:18 pm

      Wow, if all the comments in this thread were implemented, the form would be twice as long. Some Seller’s are already perplexed with it…you will just see more “Unknown” answers. One comment in particular seemed a bit extreme, th at the Seller would have to disclose if they were an attorney….what’s next, disclose if a parent, sibling or child is an attorney, or if the Seller knew an attorney or if they consulted one. Another was to add space to amend or adjust after inspections….remember “There’s a form for that training”… there is a form for that, assuming that the item noted in the inspection is valid and pertains to a material defect…not all Inspectors are perfect or accurate intheir comments,

      There are some good suggestions here to add more clarity and provide more room for some helpful comments…I hope we can move this in that direction and focus on things that are more significant….an inventory of appliances, if there is a garage door opener don’t seem to fit that bill.

      Sorry, late night after a long day….

      Reply to John Beierle
    • sylvia prouty    March 27, 2019 | 11:09 am

      Agreed! Attorneys tear things apart and read into everything!

      Reply to sylvia prouty
  • Bob Fox    March 19, 2019 | 11:43 am

    Let’s simply the disclosure. Remember when that law was originally passed, most homes were bought without a home inspection. Now few homes are bought without a home inspection. We need to have the seller disclose what problems they have. Let’s face it. How many of you Realtor remember every repair and addition you made to your home plus the year and who did it. AND also have the documentation. The more detailed you make this disclosure the more likely there will be a mistake. OR to put it another way – Just another opportunity for litigation and spending your clients money and your commission.

    Reply to Bob Fox

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