Disclosing Crime -- Form 17

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Real Estate Agent with Century 21 M&M and Associates
Disclosing Crime -- Form 17 "Crime" does not have its own category. It also does not come under "Are there any other material defects affecting the property that a buyer should know about?" It was not always that way. Stigma -- in some rare cases positive -- used to play a bigger role in disclosing components of value. For example, when Form 17 was first introduced as a voluntary form by the Puget Sound Multiple Listing Service (now the Northwest Multiple Listing Service), it included questions about any known "crimes of violence" on the property, and about suicide or death from other than natural causes. It was amended in 1993 to: "Are you aware of anyone having died of suicide or homicide on the property?" When the Washington state Legislature made Form 17 mandatory in 1995, no mention of death or crime was included. "Form 17 was intended to point out the known structural problems or systems problems with the property," said Chris Osborn, attorney for the Northwest Multiple Listing Service. "It was a reminder to the seller that if you know about it, state it. It isn't a vehicle to try and trick anybody." Form 17 was a move to help protect sellers and agents from lawsuits resulting from sellers not disclosing a home's defects and shortcomings. Questions on the form are about basic sewage, heating, repairs, termites, boundaries and neighborhood conditions. Problems found and then subsequently repaired do not need to be listed. In the first years, when Form 17 was required of local MLS agents but not legally binding, it sometimes became more of a hindrance than a help. For example, several years ago, a local case in which a caregiver stole more than $30,000 from a dying man, brought questions from real estate agents and brokers after the estate was settled. Were the seller and listing agent obligated to disclose that a felony had been committed in the home? The main question in most real estate fraud and misrepresentation cases is whether the omission of information, or a statement made, is a material fact. A "material fact" is loosely defined as something that could affect the price somebody would pay for a service or product. The federal Fair Housing Amendments Act of 1988 prohibits discrimination in the sale, rental and financing of housing based on race, color, sex, handicap, family status or national origin. Armed with that information and more, many states went back to basics, crafting seller disclosure forms to reflect the condition of the structure and its systems. But should all known "non-structure" history be eliminated from disclosure? Would you want to know if your potential getaway in the country was once a well-known clearinghouse for street drugs?
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