GENERAL ASSEMBLY OF NORTH CAROLINA
1997 SESSION
SESSION LAW 1997-472
HOUSE BILL 899
AN ACT TO MODIFY THE REQUIREMENTS FOR DISCLOSURES UPON THE SALE OF RESIDENTIAL PROPERTIES.
The General Assembly of North Carolina enacts:
Section 1. G.S. 47E-4 reads as rewritten:
"§ 47E-4. Required disclosures.
(a)
With regard to transfers described in G.S. 47E-1, the owner of the real
property shall furnish to a purchaser a residential property disclosure
statement. The disclosure statement shall contain the language and be in the
form set forth in subsection (b) of this section. The statement shall:
(1) Disclose those items which are required to be disclosed relative to the characteristics and condition of the property and of which the owner has actual knowledge; or
(2) State that the owner makes no representations as to the characteristics and condition of the real property or any improvements to the real property except as otherwise provided in the real estate contract.
(b)
A residential property disclosure statement shall read as follows:
"RESIDENTIAL PROPERTY DISCLOSURE STATEMENT
Notice to Seller and Purchaser
The North Carolina Residential Property Disclosure Act
requires the owner of residential real property consisting of 1-4 units,
whenever the property is to be sold, exchanged, optioned, or purchased pursuant
to a lease with option to purchase, to furnish to the purchaser a RESIDENTIAL
PROPERTY DISCLOSURE STATEMENT disclosing certain conditions of the property.
Certain transfers of residential property are excluded from this requirement by
G.S. 47E-2, including transfers of residential property made pursuant to a
lease with an option to purchase where the lessee occupies or intends to occupy
the dwelling.
Property Address/Description:_________________________
The undersigned owner(s) of the real property described above
disclose the following present conditions of the real property of which the
owner(s) has actual knowledge with regard to:
1. Any
abnormality or malfunctioning of the water supply or sanitary sewage disposal
system:
[]Yes
[]None Known
[]No Representations
If Yes, please describe___________________________
2. Any
damage to or abnormality of the roof, chimneys, floors, foundation, basement,
or load-bearing walls, or any leak in the roof or basement:
[]Yes
[]None Known
[]No Representations
If Yes, please describe___________________________
3. Any
abnormality or malfunctioning of the plumbing, electrical, heating, or cooling
systems:
[]Yes
[]None Known
[]No Representations
If Yes, please describe___________________________
4. Present
infestation of wood-destroying insects or organisms or past infestation the
damage for which has not been repaired:
[]Yes
[]None Known
[]No Representations
If Yes, please describe___________________________
5. The
real property's violation of zoning laws, restrictive covenants or building
codes; any encroachment of the real property from or to adjacent real property;
or notice from any governmental agency affecting this real property:
[]Yes
[]None Known
[]No Representations
If Yes, please describe___________________________
6. Presence
of lead-based paint, asbestos, radon gas, methane gas, underground storage
tank, hazardous material or toxic material (whether buried or covered):
[]Yes
[]None Known
[]No Representations
If Yes, please describe___________________________
The purchaser and owner may wish to obtain professional
advice about, or inspections of, the real property. The owner has a duty
to disclose any material inaccuracy in this statement or any material change in
the real property which is discovered between the date of this statement and the
closing of the transaction. The owner(s) acknowledge having examined this
statement before signing below:
_______
______
______
_______
Owner
Date
Owner
Date
The purchaser(s) acknowledge receipt of a copy of this
disclosure statement and further acknowledge that they have examined it before
signing below:
_______
______
_______
______
Purchaser
Date
Purchaser
Date"
(b) The North Carolina Real Estate Commission shall develop and require the use of a standard disclosure statement to comply with the requirements of this section. The disclosure statement shall specify that certain transfers of residential property are excluded from this requirement by G.S. 47E-2, including transfers of residential property made pursuant to a lease with an option to purchase where the lessee occupies or intends to occupy the dwelling, and shall include at least the following characteristics and conditions of the property:
(1) The water supply and sanitary sewage disposal system;
(2) The roof, chimneys, floors, foundation, basement, and other structural components and any modifications of these structural components;
(3) The plumbing, electrical, heating, cooling, and other mechanical systems;
(4) Present infestation of wood-destroying insects or organisms or past infestation the damage for which has not been repaired;
(5) The zoning laws, restrictive covenants, building codes, and other land-use restrictions affecting the real property, any encroachment of the real property from or to adjacent real property, and notice from any governmental agency affecting this real property; and
(6) Presence of lead-based paint, asbestos, radon gas, methane gas, underground storage tank, hazardous material or toxic material (whether buried or covered), and other environmental contamination.
The disclosure statement shall provide the owner with the option to indicate whether the owner has actual knowledge of the specified characteristics or conditions, or the owner is making no representations as to any characteristic or condition.
(c) The rights of the parties to a real estate contract as to conditions of the property of which the owner had no actual knowledge are not affected by this Article unless the residential disclosure statement states that the owner makes no representations as to those conditions. If the statement states that an owner makes no representations as to the conditions of the property, then the owner has no duty to disclose those conditions, whether or not the owner should have known of them."
Section 2. G.S. 47E-5 reads as rewritten:
"§ 47E-5. Time for disclosure; cancellation of contract.
(a) The owner of real
property subject to this Chapter shall deliver to the purchaser the written
disclosures disclosure statement required by this Chapter no later
than the time such the purchaser makes an offer to
purchase, exchange, or option the property, or exercises the option to purchase
the property pursuant to a lease with an option to purchase. The residential
property disclosure statement may be included in the real estate contract, in
an addendum, or in a separate document.
(b)
If the disclosure statement required by this Chapter is not delivered to
such the purchaser after prior to or at the time the
purchaser makes an offer, the purchaser may terminate cancel any
resulting real estate contract or withdraw the offer no later than three
days after the purchaser receives the disclosure statement. contract.
The purchaser's right to cancel shall expire if not exercised prior to the
following, whichever occurs first:
(1) The end of the third calendar day following the purchaser's receipt of the disclosure statement;
(2) The end of the third calendar day following the date the contract was made;
(3) Settlement or occupancy by the purchaser in the case of a sale or exchange; or
(4) Settlement in the case of a purchase pursuant to a lease with option to purchase.
Any right of the purchaser to cancel the contract provided by this subsection is waived conclusively if not exercised in the manner required by this subsection.
In order to terminate cancel a real estate
contract when permitted by this section, the purchaser shall, within the time
required above, give written notice to the owner or the owner's agent either by
hand delivery or by depositing into the United States mail, postage prepaid,
and properly addressed to the owner or the owner's agent. If the purchaser terminates
cancels a real estate contract or withdraws an offer in
compliance with this subsection, the termination or withdrawal of offer cancellation
shall be without penalty to the purchaser, and the purchaser shall be
entitled to a refund of any deposit shall be promptly returned to the
purchaser. Any rights of the purchaser to terminate the contract provided by
this subsection are waived conclusively if not exercised prior to the earlier
of settlement or occupancy by the purchaser in the case of a sale or exchange,
or prior to settlement in the case of a purchase pursuant to a lease with
option to purchase.the purchaser may have paid. Any rights of
the purchaser to cancel or terminate the contract for reasons other than
those set forth in this subsection are not affected by this subsection."
Section 3. G.S. 47E-6 reads as rewritten:
"§ 47E-6. Owner liability for disclosure of information provided by others.
If the owner chooses to provide a disclosure of property
condition pursuant to G.S. 47E-4, the The owner may discharge the
duty to disclose imposed by this Chapter by providing a written report
attached to the residential property disclosure statement by a public agency or
by an engineer, land surveyor, geologist, pest control operator, contractor,
home inspector or other expert, dealing with matters within the scope of the
public agency's functions or the expert's license or expertise. The owner
shall not be liable for any error, inaccuracy, or omission of any information
delivered pursuant to this section if the error, inaccuracy, or omission was
made in reasonable reliance upon the information provided by the public agency
or expert and the owner was not grossly negligent in obtaining the information
or transmitting it."
Section 4. G.S. 47E-8 reads as rewritten:
"§ 47E-8. Agent's duty.
A real estate broker or salesman acting as the an agent
of the owner of in a residential real property estate
transaction has the duty to inform the owner each of the clients
of the real estate broker or salesman of the owner's client's
rights and obligations under this Chapter. Provided the owner's real estate
broker or salesman has performed this duty, the broker or salesman shall not be
responsible for the owner's willful refusal to provide a prospective purchaser
with a residential property disclosure statement. Nothing in this Chapter shall
be construed to conflict with, or alter, the broker or salesman's duties under
Chapter 93A of the General Statutes."
Section 5. G.S. 47E-1 reads as rewritten:
"§ 47E-1. Applicability.
This Chapter applies to the following transfers of residential real property consisting of not less than one nor more than four dwelling units, whether or not the transaction is with the assistance of a licensed real estate broker or salesman:
(1) Sale or exchange,
(2) Installment land sales contract,
(3) Option, or
(4) Lease with option to
purchase, except as provided in G.S. 47E-1-2(10). G.S. 47E-2(10)."
Section 6. Section 1 of this act becomes effective October 1, 1998, and applies to contracts entered into on or after that date. Sections 2, 3, and 4 of this act become effective December 1, 1997, and apply to contracts entered into on or after that date. Section 5 of this act is effective when this act becomes law. Effective when this act becomes law, the North Carolina Real Estate Commission is authorized to develop the standard disclosure statement under the amendments made by this act to G.S. 47E-4(b) to become effective October 1, 1998.
In the General Assembly read three times and ratified this the 21st day of August, 1997.
s/ Marc Basnight
President Pro Tempore of the Senate
s/ Harold J. Brubaker
Speaker of the House of Representatives
s/ James B. Hunt, Jr.
Governor
Approved 11:53 a.m. this 2nd day of September, 1997