North Carolina Residential Property Disclosure Act & Other Disclosure Rules

Instructor: Kyle Aken

Kyle is a journalist and marketer that has taught writing to a number of different children and adults after graduating from college with a degree in Journalism. He has a passion for not just the written word, but for finding the universal truths of the world.

This lesson discusses the NC Residential Property Disclosure Act and laws/rules related to all types of disclosures, including and Brokers Responsibilities Related to Previously Mentioned Disclosures.

Using the NC Residential Property Disclosure Act

Jennifer is a newly licensed real estate broker in North Carolina. She is working on the first offer from a man named Chris to buy a house near the shore.

She reviews the North Carolina Residential Property Disclosure Act, (RPDA) to double-check her duties. The RPDA is the law that mandates what specific information must be given to a potential buyer. Since RPDA applies to residences with built for one to four families, it applies to her case. She is rushing because the disclosures required had to be given to Chris as soon as possible, as he had already given her an offer.

She uses the approved pre-printed form called the Residential Property and Owners' Association Disclosure Statement that the North Carolina Real Estate Commission (NCREC) provides to easily satisfy the RPDA. The questions on the form ask about the condition of the property and the house.

Jennifer knows that she can rely on the actual knowledge of the owner, Gertie, rather than needing to inspect the house herself. There are also questions to cover if a homeowner's association is involved.

Jennifer does not think that the Mineral and Oil and Gas Rights Mandatory Disclosure Statement is very applicable, but it is also required. This provides any information on mineral, oil or gas rights in relation to the property for sale. She notes for the future that these disclosures can be done before an offer is received - that will save her time in the future.

Broker Responsibilities Regarding Real Estate Disclosures

Jennifer can, and probably will, be held accountable for any willful or negligent misrepresentation of material facts in regards to a real estate transaction. This includes failing to provide or omitting information. The items defined as material facts, if known, are:

  1. Any structural issues, mechanical problems or defects.
  2. Pending zoning changes or street/highway construction and any other facts that impact the property usability or value.
  3. Any facts that might affect Jennifer's ability to close, like a foreclosure sale or lien.

However, if Gertie refused to answer any of questions on the form required by the RPDA, Jennifer is not required to force answers. The law recognizes that a broker cannot compel disclosures.

Jennifer needs to notify clients of disclosure requirements and provide the forms or details for the required disclosures. Jennifer does need to share all the information she knows if those facts are not material; yet she needs to be honest when answering direct questions.

Additional Required Disclosures

North Carolina laws and rules related to real estate transactions are designed to protect the public by listing the specified information that has to be shared. Jennifer looks at some other disclosures required by the rules, such as:

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