Disclosure, Disclaimer or Exemption?

Disclosure, Disclaimer or Exemption?

When an Oklahoma property is offered for sale, the property is subject to the Oklahoma Residential Property Disclosure Act. This includes the seller, whomever that may be, is required to complete certain forms such as a Disclosure Statement, Disclaimer Statement or Exemption forms. But which can you expect on the property you are interested? The answer...it depends on who lived in the home!

The Property Condition Disclosure form is to be completed by the homeowner who has lived in the home and has personal knowledge of its condition. A written property condition disclosure statement on a form established by rule by the Oklahoma Real Estate Commission shall include an identification of items and improvements which are included in the sale of the property and whether such items or improvements are in normal working order. The disclosure shall also include a statement of whether the seller has actual knowledge of defects on a list of items designated on this form.* The disclosure statement must also include notices that the information included are the "declarations and representations of the seller" and not the REALTOR®. It must also note that the items on the disclosure are not "warranties" or "part of the contract between the buyer and seller".

So, what's the Disclaimer form and who completes it? A written property disclaimer statement on a form established by rule by the Oklahoma Real Estate Commission which states that the seller has never occupied the property and makes no disclosures concerning the condition of the property, and  has no actual knowledge of any defect.* What kind of seller has never occupied thier home or doesn't know anything about the home they are selling? The most common circumstance is when a family member is selling the home of a loved one, but never actually lived in the home. A misconception is when an investor has purchased a home, remodeled and then is selling the home. The investor would need the disclosure form as they have personal knowledge about the home's construction, condition, updates, etc. However, a child who is selling their parent's home would complete the disclaimer form as they don't have personal knowledge about the home.

Finally, we come to the Exemption. When would you expect to see an exemption form attached to your property of interest? There are several circumstances such as court ordered sales, bank owned sales (REOs), sales to family members, new construction and a few other circumstances. In many cases, there may not be an exemption form but only a statement on the MLS listing clarifying that the property is exempt from submitting a disclosure or disclaimer form.

When you make an offer to purchase a home, you should have access to one of these forms completed by the seller. You should review and sign the form prior to an acceptance by the seller of your purchase agreement. There are several additional issues to be discussed in relation to the disclosure, disclaimer or exemption question such as finding an issue after submitting a disclosure, responsibility of disclosed issues, and errors on the forms.  The Oklahoma Residential Property Disclosure Act is in place to protect you, the buyer, when making your home purchase. When making this important decision, you need someone who is informed and can assist you in navigating the disclosure successfully. My experience in this process could be just the assistance you require because...What Matters to YOU, Matters to Me!

*reference: Oklahoma Residential Property Disclosure Act