NJ Seller’s Property Condition Disclosure Statement Q&A

Summary:

  • Weichert has revised the Seller’s Property Condition Disclosure Statement in the form adopted by the Division of Consumer Affairs (DCA). The DCA’s form of the seller disclosure went into effect on May 17, 2004.
  • The seller is responsible for completing the form. You, as the associate, are responsible for determining that the information contained in the Seller’s Disclosure is accurate, which includes visually inspecting the property to ensure the information, to the best of your knowledge, is accurate.
  • As a company policy, Weichert will NOT accept a listing if the seller(s) refuses to fill out the Seller’s Property Condition Disclosure form. Consult your manager if this situation arises.
  • If a Weichert buyer wants to make an offer on a Brand X property, where the seller(s) have refused to complete the disclosure form, Weichert requires our buyer(s) to sign a new form: Notice to Buyers Regarding Seller’s Property Condition Disclosure Statement.

Remember: The new form of disclosure is providing you with protections, which ultimately may minimize your liability. As long as you had no actual knowledge the information on the disclosure form was false, misleading or deceptive and that visually inspected the property with reasonable diligence to ascertain the accuracy of the information disclosed by the seller, you may avoid liability for punitive damages, attorney fees or both.

Frequently Asked Questions, Answers, and Sample Dialogue for Sales Associates:

Q1. On page 6 of 8 of the Seller’s Property Condition Disclosure Statement, #90 under the Miscellaneous heading, it states:

“Are you aware of any existing or threatened legal action affecting the property or any condominium or homeowners association to which you, as an owner, belong?

On the online course it states that divorce proceedings should be disclosed here. Is requesting my seller to disclose this information a violation of the Real Estate Code of Ethics?

ANo. As a listing associate, it is your responsibility to inquire about circumstances that maydisrupt the ability of a seller to transfer title to the property. For example, if your seller is in the midst of a divorce, that is a pending legal action, and it should be disclosed. In this case, you must make copies of necessary paperwork, such as the divorce decree and any court orders affecting the ability to transfer the property to a potential buyer, for your files.

Examples of other circumstances that may affect the transfer of the property are bankruptcy, property ownership upon death, liens/mortgages on the property, and/or foreclosure actions.

If your seller is wary about disclosing divorce information to you, as their listing associate,

advise the sellers of the following:

“I understand your concern and want to assure you that the personal details of the proceeding do not need to be disclosed. However, information such as court orders affecting the ability to sell or transfer the property does need to be disclosed to potential buyers. For your information, a title search may eventually reveal this type of information. By disclosing it now rather than later we can gather the proper paperwork to ensure a quick and smooth transfer of your property.”

Q2. As a Sales Associate, what is my level of responsibility to visually inspect the property to ensure the disclosure’s information is accurate? I am not a home inspector and can only do so much.

AThe associate’s responsibility to confirm that the information contained in the disclosure is accurate requires a common sense approach. For example, if you are unable to visually inspect specific areas of the property (roof, crawl spaces, pool) due to extenuating circumstances i.e. weather conditions, size of inspection space, etc. Makea separate note, date it and place it in the transaction file.

Q3. If as the associate I, upon visual inspection of the property, notice a discrepancy from my observations vs. the information completed by the seller on the form, what should I do?

AIf confronted with this situation, you should make a further inquiry with your seller about the information they disclosed on the form. If they continue to support their answer, you should take detailed notes on what you observe, retain a copy in the transaction file, and consult your manager prior to moving forward with the listing.

If you need to approach the seller about a discrepancy you see on the disclosure form:

“After visually inspecting your property, it seems that your roof may have a leak. Although this may not have been something you were aware of, you may want to review this condition and consider changing your response to question #6 on the disclosure form to ensure the form’s accuracy. By accurately disclosing the property’s condition to potential buyers, you may avoid future liability.”

Q4. What if the seller refuses to fill out the disclosure form?

AInform them that as a company policy, Weichert requires that all sellers fill out the Seller’s Property Condition Disclosure Statement. If the seller continues to refuse, speak to your manager.

If your seller does not want to fill out the disclosure form because they have never occupied or only briefly occupied the property, share the following with your seller.

“It is still important that you fill out the disclosure with as much information as you know. If there are questions that you do not know the answer to, you can simply use the explanation lines to explain. The fact that certain information is unknown by the seller, and why, can be important to the buyer.”

Q5. As an associate, what is my liability once I sign the form? Doesn’t signing the form put me in a vulnerable situation since what I am being asked to do seems to be outside the realm of my expertise?

ABy signing the disclosure you are acknowledging that the information contained in the form came from the seller and that you have received it. You are also confirming that you have visually inspected the property with reasonable due diligence prior to providing a copy of the form to the buyer, and that to the best of your knowledge, the seller’s information is accurate.

Weichert is aware of your level of expertise and is not expecting you to act as a licensed inspector. Buyers are told that the information in the disclosure has been filled out to the best of the seller’s knowledge, but that the seller, and the seller alone, is the source of all the form’s information. They are told to carefully inspect the property and its surroundings themselves and to obtain a qualified expert’s opinion.

Therefore, as long as you had no actual knowledge the information was false, misleading or deceptive and made a reasonable and diligent inquiry to determine if the information is of a false, misleading or deceptive character, you will not be subject to enhanced damages imposed under New Jersey’s Consumer Fraud Act.

Q6. What if I have an active listing in the MLS and there is a change in the Seller’s Disclosure that I uploaded to the listing?

AIn the event that you have posted the Seller’s Disclosure with a listing within the MLS, and you subsequently receive information (such as in an updated Seller’s Disclosure form) that contradicts what has been advertised, you should immediately correct the advertisement. Remove the old Seller’s Disclosure and upload the revised one. You also need to communicate with each buyer that subsequently submitted an offer by communicating to his/her agent that there has been a change. This allows buyers to review their offer based on the updated disclosure. Keep a record of that direct communication of the change with the buyer, especially buyers that submit an offer to buy the property.

Q7. What if the seller is incompetent and has no children to help with the disclosure form?

AIf the seller is incompetent, he/she may not be legally competent to complete the transaction. Someone else should be standing in to represent the seller legally. If there is no determination of incompetency, the Sales Associate should treat the seller as competent and get them to understand the dynamic and importance of disclosure.

Q8. As a Sales Associate can I assist the seller with filling out the Seller’s Disclosure?

AThe associate is not allowed to answer or assist with answering any of the questions on the Seller’s Disclosure.

Q9. What if I notice a discrepancy from what is answered on the disclosure form, am I allowed to write a comment on the disclosure form?

AYou are not allowed to make any notations on the disclosure form. If you notice a discrepancy you should discuss it with the seller and have them revise the disclosure form. If the seller refuses to make a revision, you should make a note of it by hand writing a note on a piece of paper, using a Word document, or if the communication is via email with the seller, you should print the email and put it in the transaction file.

Weichert UniversityFebruary 2013Page 1 of 4