Disclosure

The real estate profession has become increasingly based in legalities. While a handshake can signify an agreement, the contract is the foundation of the real estate transaction today.

With the increased focus on legal issues, NVAR provides members services in the legal arena. Various articles on current and hot legal topics are provided through the weekly NVAR Online News. In addition, the Legal Information Line is available to members.

There are many real estate related questions that arise often. These FAQs (Frequently Asked Questions) by topic are provided to assist you in finding quick answers.

Disclosure

Q: I represented a buyer in a transaction, and he just found out from the neighbor that the previous owner had committed suicide in the house. He is furious that this was never disclosed and wants to know his recourse.
A: I actually get this question quite often. Usually the scenario goes something like this: the buyer, excited about their new home is outside enjoying their garden. A neighbor walks over and strikes up a conversation, welcoming the family to the neighborhood. Within the first two minutes the neighbor makes a comment to the new homeowner about the death in the house. It always seems the neighbor innocently thought the buyer had to already know about this! So the question is then, does the seller or the seller’s agent have to disclose the fact that there was a suicide or death in the home? NRS 40.770 tells us no, this fact is not material to the transaction, except for a death that results from a condition of the property.
NRS 40.770 Limitation on liability of seller, seller’s agent and buyer’s agent for failure to disclose certain facts concerning property.
1. Except as otherwise provided in subsection 6, in any sale, lease or rental of real property, the fact that the property is or has been:
(a) The site of a homicide, suicide or death by any other cause, except a death that results from a condition of the property;
(b) The site of any crime punishable as a felony other than a crime that involves the manufacturing of any material, compound, mixture or preparation which contains any quantity of methamphetamine; or
(c) Occupied by a person exposed to the human immunodeficiency virus or suffering from acquired immune deficiency syndrome or any other disease that is not known to be transmitted through occupancy of the property,
is not material to the transaction.
2. In any sale, lease or rental of real property, the fact that a sex offender, as defined in NRS 179D.095, resides or is expected to reside in the community is not material to the transaction, and the seller, lessor or landlord or any agent of the seller, lessor or landlord does not have a duty to disclose such a fact to a buyer, lessee or tenant or any agent of a buyer, lessee or tenant.
3. In any sale, lease or rental of real property, the fact that a facility for transitional living for released offenders that is licensed pursuant to chapter 449 of NRS is located near the property being sold, leased or rented is not material to the transaction.
4. A seller, lessor or landlord or any agent of the seller, lessor or landlord is not liable to the buyer, lessee or tenant in any action at law or in equity because of the failure to disclose any fact described in subsection 1, 2 or 3 that is not material to the transaction or of which the seller, lessor or landlord or agent of the seller, lessor or landlord had no actual knowledge.
5. Except as otherwise provided in an agreement between a buyer, lessee or tenant and that person’s agent, an agent of the buyer, lessee or tenant is not liable to the buyer, lessee or tenant in any action at law or in equity because of the failure to disclose any fact described in subsection 1, 2 or 3 that is not material to the transaction or of which the agent of the buyer, lessee or tenant had no actual knowledge.
6. For purposes of this section, the fact that the property is or has been the site of a crime that involves the manufacturing of any material, compound, mixture or preparation which contains any quantity of methamphetamine is not material to the transaction if:
(a) All materials and substances involving methamphetamine have been removed from or remediated on the property by an entity certified or licensed to do so; or
(b) The property has been deemed safe for habitation by the board of health.
7. As used in this section:
(a) “Board of health” has the meaning ascribed to it in NRS 439.4797.
(b) “Facility for transitional living for released offenders” has the meaning ascribed to it in NRS 449.0055.
(Added to NRS by 1989, 629; A 1995, 845; 1997, 1674; 2003, 1338; 2005, 2353; 2007, 2772; 2009, 826)
It is important to discuss with your client the ethical dilemmas surrounding this scenario. Often the seller would rather just disclose the death. But that decision over whether or not to disclose confidential information is up to the client. Finally, it is important to keep in mind that the agent is not allowed to give misinformation or lie. You and your client should discuss what to do if a buyer asks you directly, and get that in writing and approved by your broker.


Q:  Does an agent have to disclose information about the real property he/she is listing if the seller does not disclose it on the Seller’s Real Property Disclosure form?
A:  Yes.  It is Nevada law that if the agent knows material and relevant facts, data or information about the property or by the exercise of reasonable care and diligence he should have known, he/she must disclose that information to all parties to the transaction.  NRS 645.252 states:
NRS 645.252 Duties of licensee acting as agent in real estate transaction.  
A licensee who acts as an agent in a real estate transaction:
1.  Shall disclose to each party to the real estate transaction as soon as is practicable:
(a) Any material and relevant facts, data or information which the licensee knows, or which by the exercise of reasonable care and diligence should have known, relating to the property which is the subject of the transaction.

This disclosure should be in writing and a copy kept in the transaction file.

 

Q:  My seller is a bank, is it exempt from preparing the SRPD form?

A:  NO.  All sellers must fill out and provide to the buyer the SRPD form.  Senate Bill No. 314 (SB 314) mandates all sellers to fill out the form.  The language of SB 314 adds to the language of NRS 113.130 the following:  

3.  A purchaser of residential property may not waive any of the requirements of subsection 1.  A seller of residential property may not require a purchaser to waive any of the requirements of Subsection 1 as a condition of sale or for any of the purpose. The law became effective October 1, 2011.  

Q:  Am I required to disclose an impact fees to buyers?

A:  Yes, NRS 645.278B requires disclosure.


NRS 278B.320  Seller of property to provide buyer with notice of impact fee; contents of notice; liability of seller.
      1.  The seller of any property who has actual or constructive notice of the imposition or pending imposition of an impact fee on that property which has not been paid in full shall give written notice of the fee to the buyer before the property is conveyed.
      2.  The notice must contain:
      (a) The amount of the impact fee which has not yet been paid, if it has been imposed at the time the notice is given; and
      (b) The name of the local government which imposed or will impose the impact fee.
      3.  If the seller fails to give the notice required pursuant to this section, he is liable to the buyer for any amount of the impact fee which becomes payable on the property after the conveyance.
      (Added to NRS by 1989, 845)

Q:  Am I required by law to disclose if a person died in a property I am selling or renting?

A:  Nevada law requires all real estate agents to disclose any material or relevant facts that they know about the property.   However, NRS 40.770 states:
In any sale, lease or rental of real property, the fact that the property is or has been:
(a)    The site of a homicide, suicide or death by any other cause, except a death that results from a condition of the property; is not material to the transaction.