What are the disclosure requirements for REO sales?
An REO lender is subject to certain legally mandated disclosure requirements and is well advised to provide other disclosures. Note, however, if the bank acquires the property by means other than a foreclosure, deed-in-lieu of foreclosure, or a tax sale, then the required disclosures are the same as for the resale of any property by any seller (See Cal. Civ. Code § 1102.2(c) and (i)). Please refer to the C.A.R. legal article, Sales Disclosure Chart for REALTORS®.
The following is a list of recommended disclosures for a typical REO sale in California--that is the lender acquired the property by foreclosure, deed-in-lieu of foreclosure or a tax sale. An explanation of this recommended list and the C.A.R. forms to use are provided in the answer to Question 33.
• Natural Hazard Disclosure Statement;
• Seller's Affidavit of Nonforeign Status and California Withholding Exemption;
• Megan's Law Disclosure;
• Lead Based Paint Hazards Disclosure;
• C.A.R.'s Combined Hazards Booklet;
• Water Heater and Smoke Detector Statement of Compliance;
• Methamphetamine Laboratory Activity Order;
• Condominium or Other Common Interest Development documents (if applicable);
• Seller Property Questionnaire;
• Statewide Buyer and Seller Advisory;
• Agency Disclosure Statement (applies to agents); and
• Agent's Visual Inspection Disclosure (applies to agents).
In addition to the above disclosures, certain transactions may have additional requirements, including, but not limited to, government inspection or point of sale requirements imposed by local authorities, or special requirements for manufactured homes or government housing.
What are the legally-mandated disclosures for REO sales?
The following is a list of legally-mandated federal and state disclosure requirements for a typical REO sale in California (but see Question 30 for a list of recommended disclosures):
• Natural Hazard Zones;
• Megan's Law Disclosure;
• Lead-Based Paint Hazards Disclosures;
• Smoke Detector Statement of Compliance;
• Water Heater Bracing Statement of Compliance;
• Methamphetamine Laboratory Activity Order;
• Condominium or Other Common Interest Development documents (if applicable); and
• Agency Disclosure Statement (applies to agents).
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