Disclosures to 3rd Parties Flashcards
What are the three types of misrepresentation?
Innocent
Negligent
Fraudulent
What is the best way to handle questions regarding structural issues of a building?
Inform the buyer to seek out professional advice.
What type of lawsuits are most often brought against brokers?
Misrepresentation
Common law imposes a duty upon sellers to disclose facts that:
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
For a statement to be fraudulent, the following elements must exist:
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.
What is meant by a material fact?
A material fact is an issue that would be useful for a reasonable person to know when making a decision.
What is meant by a latent defect?
A latent defect is not readily observable or readily discoverable by reasonable means.
What is a patent defect?
A patent defect is a problem or issue with a property that is obvious to most people.
Common law requires a seller to disclose facts that are of what three types?
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
A Seller’s Disclosure notice is not required for the following transfers:
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
Which party must fill out the Seller’s Disclosure Notice?
Seller/Owner
How should a seller indicate unknown information when completing Section 1 of the seller’s disclosure notice?
Write in a U for “unknown.”
What form is required to be used for the seller’s disclosure?
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®.
Stagmatized Properties
Murder
Suicide
AIDS
Haunted
Public Stigma
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.
Criminal Stigma
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.
Murder/Suicide Stigma
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.
Debt Stigma
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.
Phenomena Stigma
Some jurisdictions require disclosure if a house is known for ghosts.
Minimal Stigma
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.
There are literally hundreds of things can affect a home’s marketability, such as:
Airport noise Landslides Soil problems Sink holes Lead-based paint Hurricane damage
As an agent, here are some tips if you are dealing with a stigmatized property:
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.
Megan’s Law deals with what type of criminal?
Sex Offender
What is meant by a public stigma?
This stigma is known to a wide selection of the population and any reasonable person should be expected to know about of it.
What type of stigma is commonly known to many, but only taken seriously by a small select group?
Minimal Stigma
Why do some buyers seek out stigmatized properties?
Some buyers know they can buy at a deep discount.
Some buyers seek out stigmatized properties and then market them to niche clients.
There are three types of misrepresentations.
Innocent
Negligent
Fraudulent
Innocent
Innocent misrepresentation occurs when the agent had reasonable grounds for believing that his or her false statement was true.
Negligent
Negligent misrepresentations include failure to disclose significant property flaws out of lack of knowledge.
Fraudulent
Fraudulent misrepresentation is purposefully hiding a flaw to close the deal.
Material Fact
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
There are two types of defects:
Latent
Patent
Latent
means that the defect is not readily observable or readily discoverable by reasonable means.
Patent
defect is a problem or issue with a property that is obvious to most people
Texas requires sellers to fill out and provide buyers
with the Seller’s Disclosure Notice prior to the effective date of a contract.
The licensee should never
fill out any information on the seller’s disclosure form on behalf of the seller
The 1988 Fair Housing Act Amendments
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.
