New State Law Requires Sellers to Disclose Flaws in Property Listed and Non Listed
Source: New Orleans CityBusiness
Publication date: 2004-05-10
Beginning July 1, 2004, Louisiana residential property owners will be required by law to disclose repairs and any defects they know about when they place their home up for sale.
Until this summer, single-family home sellers have not been required to disclose property repairs and flaws. That will change July 1 when a new property disclosure law will require all Louisiana residential real estate sellers to make buyers aware of known defects and repairs. It is not a warranty made by the seller and buyers should not consider the information a guarantee on the property.
Officials from the Louisiana Real Estate Commission and New Orleans Metropolitan Association of Realtors strongly support the new disclosure rules, which they say will protect buyers and sellers. They hope it will eliminate misunderstandings about the condition of a property and reduce the potential for litigation between buyers and sellers
The form contains 34 questions, most of which can be answered yes or no. If a seller commits fraud in answering the questions and the buyer has signed a Waiver of Redhibition at the Act of Sale, the waiver may be declared null and void. The Real Estate Commission assessed a range of issues from various parts of the state and included them in the disclosure (form) because the law allowed for only one statewide form. State lawmakers had no problem forcing sellers to divulge information to buyers. Act 308 received all yes votes last year when passed by the Legislature.
Two bills now await legislative approval, which would amend the form to include additional information. House Bill 1147 requires property disclosure forms to contain information about prior zoning. For instance, it would be important for a buyer of residential property to know that at one time the land may have been zoned for industrial use. Senate Bill 52 would require forms to disclose whether a particular property falls under a homeowners association. Buyers are encouraged to read and agree with such association rules prior to making an offer on a property.
Prior to this, the Realtors had an unspoken agreement that all the residential listings d take would have the (old) disclosure filled out. Realtors felt such information was in the best interests of both sellers and buyers. However, buyers of for sale by owner properties did not recieve such benefits. Wade Ragas, of the UNO Real Estate Institute has said, " It's a very thorough form. It's not invasive. It deals just with factual information necessary so the buyer knows what they're purchasing. And it's been used by the brokerage community now for, oh, 5 or 6 years on just about all their transactions".
Compared with other states, Louisiana has one of the lowest rates of claims for Realtor malfeasance or for Realtor or seller failure to disclose in the country.This form has helped reduce claims in terms of litigation involving Realtors in this state. Mississippi's got a very high claim rate. So does Tennessee. Texas has a higher rate than us.
The Louisiana Real Estate Commission and the New Orleans Metropolitan Association of Realtors have posted the disclosure form online at www.nomar.org. Sellers are not required to use any specific form, as long as the form used discloses the minimum language prescribed by law. (Drafted April 2004)
UPDATE: In 2007 the legislature again changed the disclosures and it is recommended that you only accept discloures that have a 01/07 date at the bottom to insure that you have the current form. There are 10 types of sellers that do not have include a disclosure when selling and they include builders or sellers selling homes on behalf of the deceased. Remember, the buyer does not have to complete an act of sale if they have not recieved and signed off on the disclosure.