Buying real estate is one of the largest purchases a person can make in North Carolina. It can be an exciting time, but that does not diminish the inherent risks. Understanding rights as a buyer and making sure the seller adheres to the law can avoid problems.
As the purchase nears its conclusion, the buyers are required to receive two disclosure statements. This is a key part of the contract and failing to adhere to this requirement could jeopardize the sale.
What disclosure statements must be provided?
There are two disclosure forms. First, there is the Residential Property and Owners’ Association Statement. Also referred to as RPOADS, this is for residential real estate sales. This is generally provided before there is a purchase agreement. There are options for the seller to respond to questions on the form with “yes,” “no,” or “no representation.” When the seller answers yes or no, they are expected to be truthful. It can lead to legal problems if, for example, they knew of a defect and failed to be upfront about it.
Even if the seller does not disclose all the information related to the property when they fill out the RPOADS forms, the broker is expected to give the buyer the facts about the property. A common challenge with buying and selling property is if there are alleged defects such as mold or leaks.
The buyer will understandably be displeased if they discover defects after the fact. Knowing the realities beforehand can let them make an informed decision and avoid any legal issues. Sellers who do not disclose defects could find themselves subjected to litigation.
The other disclosure form is the Mineral and Oil and Gas Rights Mandatory Disclosure Statement (MOGMDS). This is a one-page form that is provided before there is an offer to purchase the property. This disclosure is relatively new, going into effect at the start of 2015. It is related to mineral rights such as soil, stone, sand and rock.
Like RPOADS, the seller can check the same three options. If these minerals, oil and gas rights are on the property and are owned by another entity and not the seller, this must be disclosed. Buyers would be protected if this were the case as some property owners lease or sell the rights to minerals, oil and gas to others. Obviously, a person buying a property would not want to suddenly discover that there will be drilling and other forms of extraction taking place.
Real estate buyers should know the requirements
Given the financial risk people face when they are buying property, they want to make sure their investment is as safe as possible. Part of that is being fully protected by having complete disclosure. The forms that are detailed here are critical to the process.
When there are disputes, disagreements or concerns about a real estate purchase, it is useful to be shielded from the outset and to have comprehensive advice. This can help with addressing problems as they arise or avoiding them entirely.
