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Property Condition
No matter how analytical you
are, no matter what your eye for detail and your natural intuition, there are
potential problems with a property that cannot be predicted. Therefore, when you buy or sell a home, you
must fill out, or request, a property condition disclosure form.
This form is design to
protect the buyer from any from any hidden surprises that may end up damaging
the property, and it also protects the seller from any long-term liability
after the sale of the property.
If this seems vague, let us
clarify, with an example.
Last spring I awoke in the
morning and headed down stairs to the basement after detecting a strange
smell. I had lived in the house for
three years and had never smelled anything quite like that in all of that time.
Upon reaching the basement,
I discovered that it had not only been flooded, but that dirt and silt had
seeped into the basement along with the rainwater. Needless to say I was
surprised. It had rained hundreds of
times during my tenure in that home and I had never even noticed a stray drop
of water in the basement.
After, my initial panic, I
called a contractor and he was able to both fix the problem and explain to me
what had happened. Apparently, the
storm drain outside had reached some sort of critical mass and overflowed.
He said that after looking
at the drain, it was unlikely that flooding would occur often, but he knew for
sure that it had happened before. In
the basement he noticed massively water damaged floorboards that had been
covered up with linoleum tile. Whoever
owned the home before me had had the same experience, but had neglected telling
me about it.
He asked me if it had been
mentioned in the property condition disclosure statement? I had no idea what
that was. Oops. I learned a valuable lesson that day, so
here is some advice, on what you should be asking, and expecting when you buy
home.
You don’t want any sloppy
surprises like the one I had.
General
First of all, the property
condition disclosure statement is not a guarantee, nor is it a warranty. It is simply, what is known in the sports
world as, a head’s up.
It is not a substitute for
any inspections or tests that you really should conduct before you sin on the
dotted line. You are strongly
encouraged to bring in your own private inspectors to get a sense of any potential
problems. The property condition
disclosure statement is simply a guide, which can illuminate problem areas.
If the seller fails to hand
over a property condition disclosure statement, then the buyer shall receive a
$500 credit towards the agreed upon purchase price of the residence.
For The Seller
There can be penalties of up
to $500 taken from the agreed purchase price of the home, if the form is filled
out incorrectly or if there are items deliberately left off from the
accounting.
Therefore you must:
Answer all questions based upon your actual
knowledge.
Answer all questions based upon your actual
knowledge.
Attach additional pages with your signature if
additional space is required.
Complete this form yourself.
If some items do not apply to your property,
check “NA” (Non-applicable). If you do not know the answer check “Unkn”
(Unknown).
These statements, although
they are often mediated and consulted by the agent of the seller, the seller is
by no means responsible for the information on the form. If there is a problem with the form, the
seller must take on all liability.
General Questions to Expect on Property
Condition Disclosure Form
How long have you owned the property?
How long have you occupied the property?
What is the age of the structure or structures?
Note to buyer – If the structure was built
before 1978 you are encouraged to investigate for the presence of lead
based paint
Does anybody other than yourself have a lease,
easement or any other right to use or occupy any part of your property
other than those stated in documents available in the public record, such
as rights to use a road or path or cut trees or crops?
Does anybody else claim to own any part of your
property?
Has anyone denied you access to the property or
made a formal legal claim challenging your title to the property?
Are there any features of the property shared in
common with adjoining landowners or a homeowner’s association, such as
walls, fences or driveways?
Are there any electric or gas utility surcharges
for line extensions, special assessments or homeowner or other association
fees that apply to the property?
Are there certificates of occupancy related to
the property?
The Environment
As the seller this section
requires you to think back to the history of your home. You must remember if there have been any
toxic spills or leaks involving petroleum products or any other kind of
hazardous chemicals.
Gasoline
Diesel Fuel
Heating Fuel
Lubricants
You must also notify the
buyer of any hazardous material that is not, or was not properly stored. These materials include:
Fertilizers
Pesticides
Insecticides
Paint
Paint Thinner
Varnish Remover
Wood Preservatives
Antifreeze
Batteries
Cleaning Solvents
Pool Chemicals
Anything with Mercury or Lead
*** If you are a buyer and
you suspect that the property has been exposed to any toxic elements it is
recommended that you do your own environmental assessment, including a soil
test, and a ground water test.
Other questions that you
should be prepared for include:
Is any or all of the property located in a
designated floodplain?
Is any or all of the property located in a
designated wetland?
Is the property located in an agricultural
district?
Was the property ever the site of a landfill?
Are there or have there ever been fuel storage
tanks above or below the ground on the property?
Is there asbestos in the structure?
Is lead plumbing present?
Has a radon test been done?
Has the property been tested for the presence of
motor fuel, motor oil, home heating fuel,
Lubricating oil, or any other petroleum product,
methane gas, or any hazardous or toxic
Substance Has motor fuel, motor oil, home heating fuel,
lubricating oil or any other petroleum product, methane gas, or any
hazardous or toxic substance spilled, leaked or otherwise been released on
the property or from the property onto any other property?
Structure of the Property
The buyer is also required
to tell you if there are any problems with the structure of the home. This is directly related to the immediate
safety of your family. Therefore
special consideration should be paid to the following questions:
Is there any rot or water damage to the
structure or structures?
Is there any fire or smoke damage to the
structure or structures?
Is there any termite, insect, rodent or pest
infestation or damage?
Has the property been tested for termite,
insect, rodent or pest infestation or damage?
What kind of roof, how old is the roof, are
there any material defects with the roof?
Does the roof have a transferable warranty?
Are there any know material defects in any of
the following structural systems: footings, beams, girders, lintels,
columns or partitions?
Mechanical Systems
This section pertains to the fixtures and
utilities that apply to your property.
In many cases they refer to the service that is provided but it
also includes the effective use of these services:
What is the water source? Well, private,
municipal, and other?
Is the water metered?
Has the water quality and/or flow rate been
tested?
What is the type of sewage system? Public sewer,
private sewer, septic, cesspool?
Who is your electrical service provider?
·
What is the Amperage?
·
Dies it have circuit breakers and fuses?
·
Public or private poles?
·
Any known material defects?
Are there any flooding, drainage or grading
problems that resulted in standing water on any portion of the property
Does the basement have seepage that results in
standing water?
Basic Checklist
For all other features of
the property you should be prepared to know the condition of the following:
Plumbing system
Security system
Carbon Monoxide tester
Smoke detector
Fire sprinkler system
Sump pump
Foundation
Interior walls
Exterior walls
Floors
Chimney
Patio
Driveway
Air conditioner
Heating system
Hot water heater
Water softener
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