If you are buying or selling a home, the transaction is subject to the Residential Property Condition Disclosure Act found at 60 OS 831, which provides for a disclosure of defects to the property (the “Act”). The Act is an exception to the common law rule of “caveat emptor” or “buyer beware.”
The disclosure is required if the seller is represented by a realtor. If the seller is not represented by a realtor, the disclosure is only required if requested by the buyer. Any such request must be in writing and delivered to the seller. The disclosure may be a “Disclaimer Statement” or a “Disclosure Statement.”
Disclaimer / Disclosure Statement
A Disclaimer Statement states that the seller has never occupied the property and makes no disclosures concerning the condition of the property and has no actual knowledge of any defect.
A Disclosure Statement shall include an identification of items and improvements which are included in the sale of the property and whether such items or improvements are in normal working order. The disclosures required shall also include a statement of whether the seller has actual knowledge of defects or information in relation to the following:
- Water and sewer systems, including the source of household water, water treatment systems, sprinkler systems, occurrence of water in the heating and air conditioning ducts, water seepage or leakage, drainage or grading problems and flood zone status.
- Structural systems, including the roof, walls, floors, foundation and any basement.
- Plumbing, electrical, heating and air conditioning systems.
- Infestation or damage of wood-destroying organisms.
- Major fire or tornado damage.
- Land use matters.
- Existence of hazardous or regulated materials and other conditions having an environmental impact.
- Existence of prior manufacturing of methamphetamine.
- Any other defects known to the seller.
- Other matters the Oklahoma Real Estate Commission deems appropriate.
A defect is defined as a condition, malfunction or problem that would have a materially adverse effect on the monetary value of the property, or that would impair the health or safety of future occupants of the property.
If the seller becomes aware of a defect after delivery to the purchaser of either a disclaimer statement or a disclosure statement, then the seller shall promptly deliver to the purchaser either a disclosure statement (if the initial statement was a disclaimer) or an amended disclosure statement (if the initial statement was a disclosure) which discloses the newly discovered defect. The disclosure statement or any amendment shall be in writing and shall be signed and dated by the seller. However, if the required document is delivered to the purchaser after an offer to purchase has been made, the offer to purchase can be accepted by the seller only after the purchaser has acknowledged receipt of the required document and confirmed the offer to purchase.
Violating the Residential Property Condition Disclosure Act
If the Residential Property Condition Disclosure Act is violated, the Act provides for certain remedies. The purchaser may file a civil action in District Court in the event of any of the following:
- The failure of the seller to provide to the purchaser a disclaimer statement or a disclosure statement and any amendment prior to acceptance of an offer to purchase;
- The failure of the seller to disclose in the disclosure statement or any amendment provided to the purchaser a defect which was actually known to the seller prior to acceptance of an offer to purchase; or
- The failure of the real estate licensee to disclose to the purchaser any defects in the property actually known to the real estate licensee prior to acceptance of an offer to purchase and which were not included in the disclosure statement or any amendment provided to the purchaser.
The sole and exclusive civil remedy in an action under the Act is for actual damages, including the cost of repairing the defect, suffered by the purchaser as a result of a defect existing in the property as of the date of acceptance by the seller of an offer to purchase and shall not include the remedy of exemplary damages. Any such action must be brought within two (2) years after the date of transfer of property subject to the Act. The prevailing party in any such action shall be allowed court costs and a reasonable attorney fee to be set by the court.
The Act does not apply to certain transactions, including transfers of newly constructed, previously unoccupied dwelling, transfers from one co-owner to another, transfers to a spouse or transfers between spouses pursuant to a decree of divorce.
In conclusion, the Residential Real Estate Disclosure helps protect the rights of future homeowners by disclosing any property defects. If you feel like you may need to file civil action regarding violations of The Act, give Ball Morse Lowe a call at 405-701-5355 for assistance further.