On July 1, 1993, the Ohio Residential Property Disclosure Law (ORC Section 5302.30) went into effect. The current form went into effect in 2013. Buyers are protected because sellers must disclose, in writing, any known defects of the property. On the other hand, sellers are protected because buyers are put on notice as to those disclosed defects, and once disclosed, defects should not be the basis of a post-closing lawsuit.
The Ohio Residential Property Disclosure Form requires the seller to indicate any known problems or defects regarding a variety of features and structural aspects of the home. The original form required information on the water supply, sewer system, roof, basement, structural components, mechanical systems, termites, presence of hazardous materials, drainage, code violations and wells. The new form added boundary lines, encroachments, shared driveway/party walls, flood plain, Lake Erie Coastal Erosion Area, zoning violations/nonconforming uses, assessments, homeowner’s association, historic building district, fire/smoke damage, water intrusion/mold and water quantity. It also added shared well as a source of water supply and built in appliances as a mechanical system. In some cases, the seller must indicate known problems or defects during their ownership. In other cases, the Ohio Department of Commerce has placed a five-year limit on the required disclosures. It is important to read each statement on the form carefully to ensure its meaning is understood.
The form also contains a statement that the owner is not making any representations regarding offsite conditions and that the buyers should exercise their own due diligence to investigate such matters. Information is also included about Megan’s Law and the form also states that the buyer assumes responsibility to check with the sheriff’s office for such information.
While the completion of the form by the current sellers is required, they are only asked to indicate conditions as they know them. The legislation does not require sellers to incur the expense of having a professional inspection done nor are they required to further investigate any aspect of the home mentioned on the form of which they have no actual knowledge. If the sellers do not know about the current condition of any item included on the form, they may so indicate.
Also, there are exclusions to this law. The Ohio Association of REALTORS® has developed a chart that lists the most common transactions on which you need the form and the ones on which you don’t. For complete details on its required use and exclusions, the above link to the O.R.C. can assist. Further, sometimes a seller believes that the form is not required for the real estate. In that event, OAR has an optional form that can be used in lieu of having the seller cross through each page and writing “exempt” on the form, which is a practice many REALTORS® follow. The form that has been developed by OAR for its members’ exclusive use can be accessed by clicking here.
If a seller is uncertain as to whether any of the listed exclusions apply, legal counsel must be sought for advice. The REALTOR® cannot make the determination.
There is no regulatory agency to provide enforcement of this law. Rather, if the sellers do not comply with the requirements of the law, the buyer has the right to rescind the contract. The law requires the seller to present prospective buyers with the completed and signed form as soon as practicable or before an offer to purchase is made. The buyers must acknowledge receipt of the form by returning a signed and dated copy of the form back to the seller.
The buyer has the right to rescind the contract under the following circumstances: If the buyer makes an offer prior to receiving the form, the buyer has three (3) business days after the date on which the form is received to rescind the purchase contract. However, this rescission right must be exercised within 30 days from the date the Contract to Purchase was entered into or until closing, whichever occurs first. Also, if the seller never provides a disclosure form to a prospective buyer, the buyer has the right to rescind the purchase contract for 30 days from the date the Contract to Purchase was entered into or until closing, whichever comes first. The same rescission rights apply to amended disclosure forms that are provided after the Contract to Purchase has been entered into.
Whether the Property Disclosure Form, or an amended form, is given late or not provided at all, once the transaction closes, no rescission rights exist. In this case, the best course of action for a buyer who discovers a defect in the property which was not disclosed is to contact an attorney.
REALTORS® cannot actually help sellers fill out the form; however, they can answer questions about the form itself and the process. If a seller is unsure as to how a particular section of the form should be completed, it is suggested that he/she seek the advice of legal counsel.
Date: April 18, 2014