If you decide to put a for sale sign in your frontyard are you required to tell a buyer about your home's minor problems?

by Roland Tague

In 1994, Oklahoma adopted a comprehensive law relating to the disclosure obligations of a residential seller. It is aptly named the Residential Property Condition Disclosure Act (“Act”). The type of property included within the Act is “residential real property improved with not less than one nor more than two Dwelling units.” A seller has to comply with this Act whether selling the property with the assistance of a real estate broker or selling it without a broker. This Act does not apply to commercial transactions.

The full text of the Act can be found on the Oklahoma Real Estate Commission (“Commission”) website at:

https://www.ok.gov/OREC/documents/Residential%20Property%20Disclosure%20Act%201-1-2008.pdf .

Prior to the parties entering into a purchase contract, the seller must deliver to the buyer a Disclaimer Statement or a Disclosure Statement.

If a seller meets certain conditions, the seller may sign a Disclaimer Statement instead of a Disclosure Statement. Those conditions are (a) seller has never occupied the property and makes no disclosures concerning the condition of the property, and (b) seller has no actual knowledge of any defect. This seller is frequently a person who has inherited residential property and has no personal knowledge of any defect. The form of the Disclaimer Statement can be found on the Commission’s website at:

https://www.ok.gov/OREC/documents/Appendix%20B%20RPC%20Disclaimer%20%2809-2014%29.pdf

Most sellers must sign a Disclosure Statement because they have knowledge of the condition of the residence. The form of the Disclosure Statement can be found on the Commission’s website at: https://www.ok.gov/OREC/documents/Residential%20Property%20Condition%20Disclosure%20Form%20%2811-2016%29%20%282%29.

The Disclosure Statement must identify the items and improvements which are included in the sale of the residential property. If seller intends to transfer a detached metal shed or an above ground pool (even if not in working order), these must be identified if seller intends to leave them behind after the sale is completed. The seller shall include “a statement of whether the seller has actual knowledge of defects . . .”

The Act contains a long list of specific items for which a seller must state whether the seller has actual knowledge of “defects or information relating to” those items. The following is not an inclusive list, but contains some of the items: water and sewer, structural issues, roof, foundation, plumbing, electrical, heat and air, termites, fire damage, hazardous materials, and the existence of prior manufacturing of methamphetamine.

What are the consequences to the seller for failing to disclose? The sole and exclusive civil remedy is to sue for actual damages, including the cost of repairing the defect. No punitive damages can be recovered, nor can the buyer sue to rescind the sale. If the seller has retained a real estate broker to represent the seller, the broker may also be liable.

Do you still want to sell your home yourself?


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