Real estate agents see purchase contracts day in and day out, but a closer look of one section at a time, can help agents better understand what they present to their clients. The contract updated by the Columbus Bar Association Real Property Committee with comment and input from Columbus Board of Realtors is an excellent form. For a variety of reasons, use of the most recent version of the CBR / CBA contract is recommended.
Residential Property Disclosure Form. This section is simply a notice to the parties of a separate disclosure document required under Ohio law, specifically, Ohio Revised Code section 5302.30. This statute requires a property disclosure form for all residential real property transfers including a land installment contract, lease with option to purchase, exchange of property, or perpetual lease. The statute states that no property disclosure form is required if the property is transferred pursuant to court order like from a decedent’s estate, from a trustee in bankruptcy, by a deed in lieu of foreclosure, as well as other transfer types spelled out in the statute.
Since this section of the contract is a notice provision, it could be easily glossed over. However, failing to provide the Residential Property Disclosure Form in Ohio can have profound impact on the parties’ obligations. Sometimes a buyer may reconsider their agreement to purchase and look to their realtor for “an out.” While realtors know not to give legal advice, by statue, if the seller has failed to provide the Residential Property Disclosure Form, in certain situations by following statutory protocol, the buyer may rescind the agreement. If the form has not been provided, rescission may be available up until the earlier of thirty (30) days from the date of contract or the date of closing. Upon proper rescission, the seller must then return any deposits and the buyer has no further obligation under the purchase agreement. Obviously, the form is therefore of significant importance to sellers and should ensure they promptly provide it to the buyer. This section of the purchase contract reminds the parties of that importance.
Written By: Jeff Madison & Lane Alton