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DON’T PUT YOUR CLIENTS IN THE “LITIGATION CROSSHAIRS”

By
Real Estate Agent with Keller Williams Realty Las Vegas

If you sell Real Estate in Las Vegas, I am sure you are aware of the controversy surrounding sellers not providing state required disclosures. This phenomenon began when the foreclosures went through the roof. At that time, agents were mis-interpreting our law regarding the Seller’s Real Property Disclosure (SRPD) and advising the Asset Managers for the “Bank Sellers” that they were exempt from providing the SRPD because the property was a foreclosure. This was bad advice. There is an exemption regarding foreclosure but it means  when the title is conveyed during a foreclosure. It does not apply when the “Bank Seller” is selling their foreclosed assets.

 

So in 2008, this became the norm. Buyers were being told they HAD to waive the right to receive this disclosure, seller agents were declaring the seller would not sell the property to a buyer who would not waive the rights, and it went on and on. And this was only the beginning. Next lead based paint disclosures were not being provided to my buyer clients. The Listing Agents were declaring that the Asset Managers would not fill out or sign a lead based paint disclosure unless the buyer filled it out and signed it. Buyers are not supposed to sign a blank lead based paint disclosure. This is a Federal Requirement that was, and still is, being ignored.

 

We as agents have a fiduciary duty to advise our clients correctly. By insisting buyers waive disclosures or sign disclosures that are blank, is putting these “Bank Sellers”  in the Litigation Crosshairs. Imagine if a buyer closes on a property, moves in, finds out from a neighbor that there was flooding from a burst pipe 2 weeks before closing, hires an attorney, tells the attorney that they were told they HAD to waive their rights to the disclosure or they wouldn’t get the property ~ do you see where this is going?

 

When I work with Asset Managers, I get the SRPD filled out and signed. It is a simple conversation ~ Provide the necessary disclosures so the “Bank Seller” is protected from future litigation. If you or “Bank Seller” don’t know of any material defects in property, state that. If you or “Bank Seller” know of any, disclose them. The financial ramifications that would result from a lawsuit are too high.

 

As an update to this post, as of October 1, 2011 with the passage of SB314 there is now a law prohibiting the waiver of the Seller’s Real Property Disclosure Form (SRPD). So if you are selling REO properties as either the seller’s agent or the buyer’s agent, make sure you get this form filled out and signed by the “Bank Seller”. And let’s use this as an example and start providing all required disclosures to buyers regardless of who the seller is. They were put in place for a reason. Now let’s get back to using them.

Comments (1)

Melissa Ostrom & Melville Capps Newton MA - The Mel and Mel Team
(617) 388-3151 | Century 21 Commonwealth - Newton, MA

Jennifer, this is some sound advice. Just because everyone is doing it doesn't make it right.


Melville Capps

Sep 29, 2011 04:28 PM