Disclosures to 3rd Parties

Question 1

What are the three types of misrepresentation?

Answer 1

Innocent
Negligent
Fraudulent

Question 2

What is the best way to handle questions regarding structural issues of a building?

Answer 2

Inform the buyer to seek out professional advice.

Question 3

What type of lawsuits are most often brought against brokers?

Answer 3

Misrepresentation

Question 4

Common law imposes a duty upon sellers to disclose facts that:

Answer 4

Materially affect the value or desirability of the property
Are known or accessible only to the seller
The seller knows are not accessible or obvious to a buyer

Question 5

For a statement to be fraudulent, the following elements must exist:

Answer 5

The statement must be untrue.
The statement is of a material fact.
The principal believes the statement to be untrue.
The buyer believed and relied on the statement.
The statement was made for the purpose of inducing the buyer to act.
The action resulted in damage to the buyer.

Question 6

What is meant by a material fact?

Answer 6

A material fact is an issue that would be useful for a reasonable person to know when making a decision.

Question 7

What is meant by a latent defect?

Answer 7

A latent defect is not readily observable or readily discoverable by reasonable means.

Question 8

What is a patent defect?

Answer 8

A patent defect is a problem or issue with a property that is obvious to most people.

Question 9

Common law requires a seller to disclose facts that are of what three types?

Answer 9

Materially affect the value or desirability of the property
Are known or accessible only to the seller
The seller knows are not accessible or obvious to a buyer

Question 10

A Seller’s Disclosure notice is not required for the following transfers:

Answer 10

Court order or foreclosure sale
Bankruptcy
To a mortgagee by a mortgagor, or to a beneficiary of a deed of trust
By a mortgagee or a beneficiary under a deed of trust who has acquired the real property through a court-ordered foreclosure or a deed in lieu of foreclosure
Acquired through a will or trust
From one co-owner to another co-owner
Made to a spouse or to a person or persons in the lineal line of consanguinity of one or more of the transferors
Between spouses resulting from a divorce or separation
To or from any governmental entity
Sale of a new residence
Of real property where the value of any dwelling does not exceed five percent of the value of the property

Question 11

Which party must fill out the Seller’s Disclosure Notice?

Answer 11

Seller/Owner

Question 12

How should a seller indicate unknown information when completing Section 1 of the seller’s disclosure notice?

Answer 12

Write in a U for “unknown.”

Question 13

What form is required to be used for the seller’s disclosure?

Answer 13

Texas promulgated Form OP-H or a form that reads substantially similar to the TREC form that is available through a local Board of REALTORS®.

Question 14

Stagmatized Properties

Answer 14

Murder
Suicide
AIDS
Haunted

Question 15

Public Stigma

Answer 15

The stigma is known to a wide selection of the population and any reasonable person should be expected to know about it. Examples are the Amityville Haunted House and the home of the Menendez brothers.

Question 16

Criminal Stigma

Answer 16

The subject property was used in the ongoing commission of a crime. For example, a house can be stigmatized if it has been used as a chop shop, drug house, or brothel.

Question 17

Murder/Suicide Stigma

Answer 17

Some jurisdictions in the United States require property sellers to reveal if murder or suicide occurred on the premises. For example, California requires this disclosure if the event occurred within the previous three years.

Question 18

Debt Stigma

Answer 18

This occurs when debt collectors are not aware that a debtor has moved out of a particular residence and continue to harass the new owners.

Question 19

Phenomena Stigma

Answer 19

Some jurisdictions require disclosure if a house is known for ghosts.

Question 20

Minimal Stigma

Answer 20

This is information commonly known to many, but taken seriously by only a small select group. An example of this is the unlikely ability to resell a property, though a lot of minimal stigmas tend to fall under issues involving the property’s location, such as neighborhood or odd land plot.

Question 21

There are literally hundreds of things can affect a home’s marketability, such as:

Answer 21

Airport noise
Landslides
Soil problems
Sink holes
Lead-based paint
Hurricane damage

Question 22

As an agent, here are some tips if you are dealing with a stigmatized property:

Answer 22

Determine if the incident is based on fact or rumor.
Get a lawyer’s opinion in writing.
If you are required by law to disclose, do so up front.
Consult with your client and be prepared to adjust the price.
Get an appraisal from an experienced professional.
Above all be open and honest.

Question 23

Megan’s Law deals with what type of criminal?

Answer 23

Sex Offender

Question 24

What is meant by a public stigma?

Answer 24

This stigma is known to a wide selection of the population and any reasonable person should be expected to know about of it.

Question 25

What type of stigma is commonly known to many, but only taken seriously by a small select group?

Answer 25

Minimal Stigma

Question 26

Why do some buyers seek out stigmatized properties?

Answer 26

Some buyers know they can buy at a deep discount.

Some buyers seek out stigmatized properties and then market them to niche clients.

Question 27

There are three types of misrepresentations.

Answer 27

Innocent
Negligent
Fraudulent

Question 28

Innocent

Answer 28

Innocent misrepresentation occurs when the agent had reasonable grounds for believing that his or her false statement was true.

Question 29

Negligent

Answer 29

Negligent misrepresentations include failure to disclose significant property flaws out of lack of knowledge.

Question 30

Fraudulent

Answer 30

Fraudulent misrepresentation is purposefully hiding a flaw to close the deal.

Question 31

Material Fact

Answer 31

an issue that would be useful for a reasonable person to know when making a decision. “Material” means that the object of the statement is significant to the decision-making process

Question 32

There are two types of defects:

Answer 32

Latent

Patent

Question 33

Latent

Answer 33

means that the defect is not readily observable or readily discoverable by reasonable means.

Question 34

Patent

Answer 34

defect is a problem or issue with a property that is obvious to most people

Question 35

Texas requires sellers to fill out and provide buyers

Answer 35

with the Seller’s Disclosure Notice prior to the effective date of a contract.

Question 36

The licensee should never

Answer 36

fill out any information on the seller’s disclosure form on behalf of the seller

Question 37

The 1988 Fair Housing Act Amendments

Answer 37

established that people diagnosed with AIDS are a protected class. According to the Department of Housing and Urban Development (HUD), it is illegal for real estate agents to make unsolicited disclosures that a current or former occupant of the property has AIDS.