LA Connection Property Blog: Disclose, Disclose, Disclose

Disclose, Disclose, Disclose

Disclosures are extremely important in Real Estate. So as a Selling Agent in a deal where the Listing Agent fails to provide the required Disclosures one is placed in an awkward situtaion, which could have legal repercussions later on.

I'm representing a client in a REO transaction and the Agent represetning the bank sent me all the standard Disclosure documents provided by C.A.R. (California Association of Realtors), but wherever the Seller's signature should be is a bold rubber stamp claiming "Seller Exempt".This is not necessarily true.

In terms of the REO ADVISORY Disclosure that C.A.R. has prepared, the Seller in not exempt from the following: Natural Hazard Zone Disclosure; Smoke Detector Disclosure; Water Heater Strapping Disclosure; Lead Based Paint Disclosure; Tax Withholding Disclosure; and Agency Disclosure.

I checked with an attorney from the C.A.R. Legal Desk who advised that even without these Disclosures an escrow can close - but recommended that I confirm in writing to both the Buyer and the Listing Agent that notwithstanding the requirement, the Seller failed to provide these Disclosures.

By agreeing to close escrow without these Disclosures the buyer does not waive his rights to recourse against the Seller should he discover and be able to prove that the Seller should have made disclosures in terms of the required Disclosure documents.

Agents need to go the extra mile to protect their clients as well as themselves against potential problems that may surface after the deal closes.

Comment balloon 11 commentsCOMPASS PALM SPRINGS | Stewart Penn • August 27 2008 11:49AM

Comments

It's one of the few things you the agent has to help defend yourself in a lawsuit.

Posted by John Walters, Licensed in Louisiana (Frank Rubi Real Estate) over 12 years ago

Thanks for the post Stewart,

Its always better to be unfront & get everything cleared up from the start

Posted by Eric Egeland, SFR, e-PRO, CDPE (RE/MAX SUBURBAN) over 12 years ago

I never thought about the special disclosures for CA, like the Natural Hazard Zone Disclosure. Isn't the entire state in a natural hazard zone due to earthquake activity or is it just the areas on fault lines? What is the Tax Withholding Disclosure?

Posted by Retired Notworking over 12 years ago

John / Eric - As agents we need to be extra cautious in this economic climate where an irrate client may look to the Broker for compensation if something goes wrong.

Colleen - The Natural Hazard Disclosure details flood areas, very high fire risk zones, area subject to landslides, areas subject to Liquefaction, specific areas on Faultlines, amongst others.

The Tax Withholding Disclosure (FIRPTA) refers to non-residents who sell property and may be subject to State and Federal taxes

Posted by COMPASS PALM SPRINGS | Stewart Penn, COMPASS Palm Springs - Broker Associate (COMPASS) over 12 years ago

Stewart, Thanks for the answers. I lived in CA for a couple of years and it's a beautiful state - a little scary and very expensive - but beautiful.

Posted by Retired Notworking over 12 years ago

Just amazes me that sellers sometimes dont want to do disclosures, much better to lay it out.

Posted by Kim Sellers, Lake Arrowhead Realtor - BRE#01412099 - Lake Arrow (Lake Arrowhead, CA Coldwell Banker) over 12 years ago

Here in Massachusetts, both Buyer and Seller retain Lawyers to handle required disclosures and to answer any legal questions in any real estate transaction.  I am amazed in California all of the disclosures and legal obligations (or possible ramifications) fall on the Agents!  Eeekk!!

Posted by Rick Tourgee, Provincetown and Cape Cod (Robert Paul Properties, Inc.) over 12 years ago

Rick - Yep, the agent carries a lot of responsibility and that's why our E&O is so high in California.

Posted by Stewart Penn - BRE# 01339266, Stewart Penn - Associate Broker (Windermere Real Estate - Palm Springs) over 12 years ago

"Agents need to go the extra mile to protect their clients as well as themselves against potential problems that may surface after the deal closes."

This is important because we must protect the client as well as our career. In the early 90's in Texas I dealt with so many REO people who were just paper pushers at a desk and the current foreclosure crisis is populated with the same sort of indifferent and and unprofessional folks who go home at 5 every day and treat you like a number.

When this passes, we will still be working in real estate and many of the people on the other end will work in another bureaucratic part of some other organization...OK. Nuff said!

Posted by Russell Lewis, Broker,CLHMS,GRI (Realty Austin, Austin Texas Real Estate) over 12 years ago

Russell - Well said - Thanks for reading and commenting.

Posted by COMPASS PALM SPRINGS | Stewart Penn, COMPASS Palm Springs - Broker Associate (COMPASS) over 12 years ago

Thanks for the great information.

Have a Wonderful Day

Posted by Doris Freeman, Broker/Agent, Realtor (RE/MAX REALTY SOURCE) over 12 years ago

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