State Senator Brent Steele of Bedford has filed legislation that would eliminate the seller's residential disclosure requirement. His proposed "Buyer Beware Law" is contained within Senate Bill 9 and has been assigned to the Committee on Corrections, Criminal and Civil Matters, which Senator Steele chairs.
Senator Steele filed similar legislation last year, but did not request a hearing on the bill so that it could be, in his words, "properly vetted by the industry". In August, at the Senator's request, the Indiana Association of REALTORS® (IAR) published a letter from Steele via the Indiana REALTOR® Advocate to begin that conversation with its membership. IAR also established the following message board to collect feedback: http://norealestatedisclosure.blogspot.com.
The blog comments were strongly opposed to the elimination, and IAR asks that its members carry that message to the Committee, as well as Senator Steele. A list of Committee members and e-mail addresses follows:
Senator Jim Arnold (D-LaPorte) s8@in.gov
Senator Richard Bray (R-Martinsville) s37@in.gov
Senator Jeff Drozda (R-Westfield) s21@in.gov
Senator Glenn Howard (D-Indianapolis) s33@in.gov
Senator Timothy Lanane (D-Anderson) s25@in.gov
Senator Karen Tallian (D-Portage) s4@in.gov
Senator Brent Steele (R-Bedford) s44@in.gov
Senator Brent Waltz (R-Greenwood) s36@in.gov
Senator John Waterman (R-Shelburn) s39@in.gov
Senator R. Michael Young (R-Indianapolis) s35@in.gov
Senator Joe Zakas (R-Granger) s11@in.gov
All of the above-named Senators may be reached by calling 1-800-382-9467 or by writing to them in care of the Indiana State Senate, 200 West Washington Street, Indianapolis, IN 46204.
IAR plans to follow-up with the Committee members, so please let IAR Government Affairs Director Sally Johnson know of any response you receive to your outreach.
Frank Schulte-Ladbeck Professional Real Estate Inspections - Houston, TX
It is certainly nice of the senator to put the responsibility on us inspectors by having our own insurance deal with the problem, but he does seem to miss the point. Although Indiana licenses inspectors, so I am sure there is a higher standard for inspections in your state than one that does not oversee an inspector, no inspector or homeowner can ever know or find out everything that has happened with their home. The case of the termite damage is a good point. If the majority of the damage was repaired and after opening up a wall signs of the past activity found, is it a lie to say there is no current damage? The senator argues that his bill will prevent litigation. What will the buyers do? If they had the propensity to sue under the old rules, would they not still sue under the new? The seller would continue to be a target, but like the case mentioned by the senator, the courts would find for the seller.
Maybe a Seller's Disclosure notice is not the most functional vehicle for discovery, but the esteemed senator does not really offer much of an alternative.
Dec 15, 2007 09:36 PM
San Diego, CA
Morning Bruce and Justine,
It just seems no matter how hard we try to disclose everything we know about a home, there are things that neither the agent, home inspector or seller are not aware of. It should be interesting.
Dec 15, 2007 10:52 PM
Sycamore Group Associates - Carmel, IN
Frank,
I think the state Senator does raise an interesting point with the example of the termite issue. An inspector can't find hidden damage, yet the homeowner thinks they have made all necessary repairs and no longer has an item that needs to be disclosed.
Should homeowners list every repair they have ever done to a home just to keep from being sued in the future?
While I agree the disclosure form isn't perfect, I think it does prevent a lot of willful fraud on the part of homeowners who realize they could be sued in the future for failing to disclose pertinent facts about their property.
Dec 15, 2007 11:41 PM
Frank Schulte-Ladbeck Professional Real Estate Inspections - Houston, TX
I do agree that something needs to be done about litigation. My feelings may be tainted by the fact that as an inspector, the senator in his letter seems to want to shift the focus on to me. Any inspection is visual, so it would be difficult to see termite damage when any remaining evidence is covered up. In that case, an inspector's E&O insurance should not take the hit.
I do not suggest scrapping the Seller's Disclosure, nor do I think every repair should be listed. I know that these forms differ slightly from state to state due to the laws in those states, but is not the underlying thought behind such forms to disclose what is believed to be current problems? I think the issue lies in the nature of our society in regards to law suits. Maybe some type of vetting process before it goes to trial. Anyone can sue for any reason. It does not mean that the suit was justified, or that they will win, so a process to have such cases removed from the docket might be in order.
By the way, thank you for the post. It is nice to see what is going on in other states on this topic. In Texas, a new law regarding the seller's disclosure involves the hearing impaired. When a buyer informs the seller that he is hearing impaired and the seller has to provide the proper equipment to warn the homeowner of a fire. It was decided to have this on the disclosure form, because the seller has to fill out if he has already installed such equipment in the house.
Dec 16, 2007 01:04 AM
Rainer
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