Real Estate Market – Alexandrias sellers bound by new disclosure laws

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Alexandrias sellers will be disclosing more about their property to buyers this spring, as new regulations ordained by the Virginia Residential Disclosure Act, passed by the General Assembly, are implemented.  The requirements are designed to provide greater transparency of the understanding between buyer and seller, as to the true condition of the property at hand.

In practice, the seller must provide the buyer with more information than available to date about the condition of a property being sold.  The mandated form combines the old Disclaimer and Disclosure forms into one document.  In the recent past, the two declarations were separate and used on an either, or basis.  Either you disclaimed any knowledge of deficiencies in the property and it sold as it was on either the date of contract or the date of settlement, or you disclosed known conditions the purchaser would be entitled to weigh when pricing an offer. 

Under the new legal requirements, the owner must decide whether or not the property is being sold as is.  Under these guidelines, the owner makes no representations as to the condition of the property or the reliability of any improvements.  This sometimes raises an eyebrow with buyers agents who wonder what there is the seller isnt owning up to.

To date, however, it was THE accepted practice to disclaim, so that no follow-on lawsuits would encumber the seller warranted or unwarranted.  The buyer usually sees this as a need to lay out funds to ascertain the actual condition of the property, sometimes elongating the settlement process, if services are needed to render the home acceptable to the buyers standards.  All of the questions concerning the condition of the property, as acceptable to both seller and buyer are satisfied prior to settlement.

In the new form, the owner also disclaims knowledge of or obligation to the conditions of adjoining homes.  This is the responsibility of the buyer.  Additional buyer responsibilities under the new Disclaimer Statement may include checking public records to see if any historic ordinances affect the property, the existence of resource protection ordinances relating to the property and information related to sexual offenders who may be registered in the area. 

The obvious available tools the buyer has at hand would be a review of local maps, zoning ordinances, the Virginia sex offender registry (www.vsp.state.va.us), pre-existing inspection reports on the property and so forth, as well as consulting with a realtor, whose job it is to represent the interests of buyer or seller, but rarely both.

Still, when disclaiming, to comply with the new law, owners must disclose if the property is situated in Planning District 15 specifically if the owner is aware of any mining activities that might have taken place on the property, or of existing abandoned mines, shafts or pits.  Additionally, the usual disclosures are still required:  compliance with the Virginia Condominium Act, The Virginia Cooperative Act and the Virginia Property Owners Association Act. 

The conditions set forth in the new form are required to be satisfied and approved by both parties prior to ratification (acceptance) of any contract, as has been the case in the past.

If the owner does not satisfy all the requirements under the new Residential Disclosure Act prior to ratification, the buyer can walk away within three days of delivery of the Statement by hand, or within five days after the postmark is the Statement is mailed.

Any change in condition of the property prior to settlement must be made known to the buyer prior to settlement, but this does not constitute grounds for a buyer to walk out on the contract, as water leaks or the like sometimes occur at inopportune times.  The key factor is whether or not the owner remediates the condition to the satisfaction of the buyer, and acts in good faith by disclosing a change in the condition of the property.

Overall, this document puts both buyer and seller on better footing, by making clear what is being sold and what is being bought.  This should enhance the relationship in the purchasing and settlement process of homes changing ownership in Alexandria.  The adage of, If in doubt, disclose still remains the best guideline for sellers.

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