Yes and no. Seller's disclosure requirements do not apply to foreclosure sales, or to the subsequent sale by a foreclosing lender (Texas Property Code Section 5.008). Foreclosure sales are also exempt from the federal lead-based-paint disclosure requirements. However, a subsequent sale by the purchaser at a foreclosure sale, including a foreclosing lender that purchased the property at the foreclosure sale, is not exempt from the lead-based-paint disclosure requirements for pre-1978 property. Lenders or any other buyers who purchase such property should complete and attach the TREC lead-based-paint addendum (TAR 1906) to the sales contract and provide the federally approved pamphlet to the buyer. REALTORS® involved in those transactions must ensure compliance with the federal regulations by the selling lender (or other seller) as stated in the addendum. Remember, you risk a $10,000 penalty and up to three times the damages to someone injured each time you violate the federal lead-based-paint disclosure requirement.
Do the Texas seller's disclosure requirements and the federal lead-based paint regulations apply to residential foreclosure properties built prior to 1978?
The owner of a home that I have been leasing and managing recently passed away. Her will left the property to her son and daughter. Her son is also the independent executor of her estate. When listing the property for sale, the son, who is an attorney, told me that he is not required to provide a seller's disclosure notice. Is he right?
Section 5.008 of the Texas Property Code lists the statutory exceptions to the seller's disclosure notice requirements. While he is acting in the capacity as executor for his mother's estate, the son is exempt under the fifth exception listed in that section. However, neither the son nor the daughter as heirs and owners of the property are exempt from the statutory requirement. Even if a seller is exempt from the seller's disclosure requirements of Section 5.008, all sellers have an obligation to disclose known defects about their property. Failure to do so exposes them to liability under the Deceptive Trade Practices Act or other civil laws. As listing agent and property manager, it is appropriate for you to share your property file and personal knowledge about defects of or problems with the property with the son and daughter so that they can incorporate that information into their seller's disclosure notice. Information that you have about the property could be the focus of any subsequent suit involving withholding information concerning the condition of the property. Licensees have a duty to disclose to any potential purchaser any significant defects that they know about the property even if the seller does not disclose that information. Failure to do so may result in sanctions by TREC or civil liability. Finally, since the son and daughter are the owners of the property, they should both sign your listing agreement and any contract on the property.
Where does the broker disclose whom the broker represents?
Disclosure of representation, including intermediary status, is made in the box captioned "Broker Information and Ratification of Fee" on the last page of each form.
Under what conditions would the seller check the box in paragraph 7C to show that the seller's disclosure notice is not required?
The Texas Property Code disclosure requirements are applicable to the sale of a property comprising not more than one dwelling unit, but do not apply to a transfer pursuant to a court order or foreclosure sale; by a trustee in bankruptcy; to or by a mortgage or beneficiary under a deed of trust or pursuant to a court ordered foreclosure or acquisition by a deed in lieu of foreclosure; by a fiduciary in the administration of a decedent's estate, guardianship, conservatorship, or trust; from one co-owner to one or more co-owners; made to a spouse or to a person or persons in the lineal line of consanguinity of one or more of the transferors; between spouses resulting from a decree of dissolution of marriage or legal separation or from any governmental entity; transfers of new residences of not more than one dwelling unit which have not been previously occupied for residential purposes; or transfers where the value of any dwelling does not exceed 5% of the value of the property.