Property Disclosure and Environmental Issues
What document should a buyer's agent confirm has been issued when representing a purchaser of a home in a new subdivision? A)Certificate of occupancy B)Certificate of compliance C)Building permit D)Code certificate
A) Certificate of occupancy
Mold is MOST likely to develop A) when there is adequate air circulation. B) with humidity. C) in a basement. D) in attics with high heat levels.
B) with humidity. - Mold needs humidity to grow and can grow in any location, particularly if there is also lack of air circulation.
Before constructing an addition to an existing home, a homeowner should secure A) a certificate of compliance. B) a code certificate. C) a building permit. D) a certificate of occupancy.
C) a building permit. - Before constructing an addition to an existing home, homeowners should secure a building permit from their local jurisdiction. A certificate of occupancy is issued after construction of a new building to indicate that the building is in compliance with building codes or with minimum standards of construction.
Information that is important to buyers that could change their decision to purchase a property is known as A) a latent defect. B) a physical defect. C) a material fact. D) a observable defect.
C) a material fact. - A material fact is any fact relevant to a person making a decision to buy a property. A latent defect is a hidden structural defect usually resulting from faulty construction known to a seller but not readily discoverable by inspection.
A couple accompanies a property inspector during an inspection of a house on which they have a contract. The inspector points to a six-inch crack at the corner of a dining room window. The crack is an example of A) a environmental defect. B) a structural defect. C) a patent defect. D) a latent defect.
C) a patent defect. - A patent defect is easily visible when inspecting a property. A latent defect is a hidden defect that is not easily visible during an inspection and may be known to a seller but not disclosed to an agent or buyer. A small crack at a window is usually not a structural defect in a property and does not indicate an environmental danger.
Radon is A) not found in older homes. B) easy to detect because of its odor. C) an odorless, colorless radioactive gas. D) only found in the eastern United States.
C) an odorless, colorless radioactive gas. - Radon is odorless and tasteless, and is impossible to detect without testing. Radon can cause health problems, and evidence suggests that it may be a cause of lung cancer. It is found in every state, and radon accumulation may be found in older and in newer homes.
A radioactive, odorless gas which may build up inside buildings is A) urea-formaldehyde. B) polychlorinated biphenyls (PCBs). C) radon. D) asbestos.
C) radon - Radon is an odorless, radioactive gas that can build up in basements and crawl spaces and move to upper floors. PCBs can be found in electrical equipment. Asbestos is a mineral used in furnace wraps, and urea-formaldehyde was used in insulation.
The listing broker learned, while he was out of town, that there was a large hail and rain storm that caused some flooding in the area of the property he is due to close on this week. The seller has not called to report any issues with the property, even though many properties in the neighborhood were damaged. The listing broker A) has no duty to inform the buyer since he represents the seller. B) has no responsibility because it will be the buyer's broker who should request an inspection. C) should verify no damage has occurred to the property. D) does not need to worry since only the seller will be liable if there is undisclosed damage.
C) should verify no damage has occurred to the property. - The listing broker will want to make sure the seller understands that disclosure of material facts is required until title passes. The buyer's broker would also need to be proactive in requesting a new seller's property disclosure or asking to have the roof certified, but since the listing broker knows the storm occurred, he must verify if there is damage.
MOST states require a property condition disclosure in a residential transaction. The statement is completed by A) the broker. B) the property inspector. C) the seller. D) the seller and salesperson or broker.
C) the seller. - Most states require the seller to complete a property condition disclosure. The listing broker should review the disclosure form and question the seller about any items that are incomplete. The disclosure does not replace the need for a property inspection to be conducted on behalf of the buyer. A buyer's agent should recommend that a buyer secure an independent property inspection.
The seller has completed a property disclosure for an "as is" sale, which states all items are in working order. After closing, the buyer finds out the sewer system has had long-term problems. The person or persons MOST likely to be held responsible for the misrepresentation is A) the buyer's broker. B) no one since it is an "as is" sale. C) the seller. D) the listing broker and seller.
C) the seller. - The seller must disclose all material facts on all sales. "As is" simply means the seller is not repairing issues—not that the seller has no obligation to disclose them.
A seller discovered radon and has sealed the cracks in the foundation and told the listing broker that he feels sure the problem is solved. The listing broker should do which of the following? A) Disclose the radon if the buyer does not have a radon test done B) Not worry, as the buyer's inspector will find any problems C) Not disclose, because the broker represents the seller and it might cause the seller harm D) Disclose the radon issue to all potential buyers
D) Disclose the radon issue to all potential buyers - The discovery of radon is a material fact that may affect a purchaser's decision to buy the house. The listing broker is required to disclose the radon whether or not the buyer conducts a radon test. All buyers should heed the recommendation to test for any hazardous material—especially radon.
A real estate salesman shows a house constructed in 1912 to a prospective buyer. The buyer has two toddlers and is worried about potential health hazards. Which of the following is TRUE? A) Because of the age of the house, there is a good chance of the presence of lead-based paint. B) Removal of lead-based paint and asbestos hazards is covered by standard title insurance policies. C) Because the salesman is a licensed real estate salesperson, he can offer to personally inspect for lead and remove any lead risks. D) Lead-based paint is more of a threat to adults than children.
A) Because of the age of the house, there is a good chance of the presence of lead-based paint.
A salesperson who has a seller complete a property disclosure form and who provides the form to a buyer in a timely manner is protecting the liability of A) the brokerage. B) the buyer. C) the home inspector. D) the lender.
A) the brokerage. - The principal broker and the salesperson are responsible for properly disclosing any defects in the property to the buyer. By providing the disclosure form in a timely manner, the salesperson is protecting the liability of his broker.
Lead would likely to be found in all of the following EXCEPT A) paint. B) insulation. C) soil. D) pipes.
B) insulation -Lead was an additive to both paint and gasoline, which can end up in soil. Plumbing pipes, for a number of years, were made from lead. Insulation does not use substances which contain lead, so it is unlikely to contain lead material.
Which of the following conditions does NOT create a stigmatized property that may or may not be disclosed under the laws of some states? A) A suicide occurred on the property. B) The property was the site of gang-related activity. C) The owner of the property has AIDS. D) A murder occurred on the property.
C) The owner of the property has AIDS. - All of the other events may stigmatize a property and may or may not allow disclosure to a prospective buyer under state laws. Under federal fair housing laws, people with AIDS are considered handicapped and members of a protected class. The fact that an occupant of a property has AIDS does not require disclosure to a prospective buyer.
Abandoned factories, former dry cleaning properties, and vacant gas stations that may contain environmental hazards are classified as A) priority list sites. B) greenfields. C) brownfields. D) wetlands.
C) brownfields. - A brownfield site is real property that is affected by the presence or potential presence of a hazardous substance. Brownfields that are not corrected may be prevented from redevelopment and can cause decreased property values in a neighborhood. Wetland s are land areas with significant groundwater at or near the surface that produces a wetland plant community. Wetlands are often subject to federal, state, or local conservation controls.
Radon poses the greatest potential health risk to humans when it is A) emitted by malfunctioning or inadequately ventilated appliances. B) contained in insulation material used in residential properties during the 1970s. C) found in high concentrations in unimproved land. D) trapped and concentrated in inadequately ventilated areas.
D) trapped and concentrated in inadequately ventilated areas. - When radon gas accumulates in a poorly ventilated area in a structure or in a mine, its harmful effects are increased. Radon concentrations in unimproved land does not accumulate to levels harmful to humans. Radon is not contained in insulation materials. It is not a result of malfunctioning appliances.
Before a buyer makes an offer on a property, the buyer should have received and read A) the independent contractor agreement. B) the seller's property disclosure form. C) the general warranty deed. D) the broker policy manual.
B) the seller's property disclosure form. - The buyer should receive and read a seller's property disclosure statement before making an offer on a property. The independent contractor agreement establishes the employment relationship between a broker and salesperson and is not read by the buyer. The broker policy manual provides policies and procedures for the brokerage firm and is not a document usually provided to buyers. The general warranty deed fully warrants good clear title to the premises.
All of the following are frequent reasons for lawsuits EXCEPT A) ignoring sloping floors and excessive settling. B) avoiding telling the buyer that the remodeling job was done without the necessary permit. C) disclosing in writing that there was previous flooding in the basement. D) concealing previous water leaks
C) disclosing in writing that there was previous flooding in the basement.
A salesperson working with a customer knows the neighborhood he is showing is very near an airport with low-flying planes that create a lot of noise. The salesperson should disclose the level of airplane noise in the neighborhood because it is A) a material defect. B) material information. C) a material breach. D) a material fact.
D) a material fact. - A material fact is information that, if known, could change a buyer's decision to purchase a property. Airplane noise is a material fact and should be disclosed to the buyer.
A broker listing an older home secures his own property inspection to discover any defects in the property. The inspection reveals that water has been seeping into the basement and the crawl space beneath the house for years. What should the broker advise the seller to do? A) Reveal the problem on the property disclosure form B) Leave the discovery of the problem up to the buyers C) Hide the problem as much as possible to get the best price from a buyer D) Tell buyers that any drainage problems have been corrected
A) Reveal the problem on the property disclosure form - The seller has a duty to discover and disclose any known defects that threaten structural soundness or personal safety. A broker must disclose any known material fact to a buyer or a buyer's agent. A buyer's property inspection does not relieve the seller or the broker of the duty to disclose the problem to the buyer.
Who should fill in the blanks of the seller property disclosure form? A) Seller B) Home inspector hired by the real estate licensee C) Home inspector hired by the seller D) Real estate licensee who is listing the property
A) Seller - Because the seller is in a better position than anyone else to know and provide information about any defects in the property, the seller should fill in the blanks without the assistance of the real estate licensee.
A real estate agent may be guilty of negligent nondisclosure by failing to exercise adequate care to discover A) a material defect and disclose it to the buyer. B) a material defect and disclose it to the seller. C) a defect in the property. D) a material defect.
A) a material defect and disclose it to the buyer. - A real estate agent may be guilty of negligent nondisclosure by failing to exercise adequate care to discover a material defect and disclose it to the buyer.
A prospective buyer looking to build on a vacant lot asks his salesperson if a septic tank could be built on the lot. The salesperson may suggest that the buyer conduct A) a percolation test. B) a hydroponics test. C) a topography test. D) a septic soil test.
A) a percolation test. - A percolation test determines how quickly the ground will absorb water and would be conducted to determine if a septic tank could be installed on the lot. A septic tank can be installed only if the soil has the ability to absorb and drain water. Hydroponic refers to a method of growing plants in water rather than in soil and is not related to septic tank installation
When a property is misrepresented because defects are not disclosed to a buyer, the buyer may be able to rescind a sales contract or receive A) compensatory damages for repair of the defect. B) incidental damages that occur in every real estate transaction. C) a return of any earnest money paid to the seller. D) special damages due to the inconvenience to the buyer.
A) compensatory damages for repair of the defect. - Compensatory damages are a monetary payment for the repair of the defect. In some cases, a court may award other payments to the buyer for flagrant misrepresentation.
A seller tells a listing broker his home is serviced by a city water system for both water and sewer services and indicates city water service on the property disclosure form. The broker suspects there is no city water to the home because it is in a rural area, but she relies on the seller's statement and says nothing concerning the water system to a buyer. The buyer discovers after the purchase that the home has no city water service. In this case, the broker A) may be liable for misrepresentation since she should have known about the lack of city water services. B) is not liable for misrepresentation since the seller did not disclose the lack of city water services. C) may file a complaint against the seller with the state real estate commission. D) may file suit against the seller for not disclosing the lack of city water services.
A) may be liable for misrepresentation since she should have known about the lack of city water services. - The listing broker may be liable since she should have confirmed whether or not the house had city water service. Real estate professionals may, for the most part, rely on the statements of buyers and sellers unless they have reason to believe the statements are not truthful. A real estate commission only investigates complaints against real estate licensees. A court may find the seller liable for misrepresentation.
A prospective buyer looks at a house listed for sale and asks the listing broker if it is connected to the city water system. The broker does not know the answer, but sensing it is important to making a sale, says "yes." If the prospect relies on this statement, purchases the house, and finds out there is no sewer system, the broker A) may face court action resulting in cancellation of the sale and money damages. B) is not liable for information she does not know. C) will only be liable if she falsifies the property disclosure form. D) is not liable, as the buyer is responsible for her own property inspection.
A) may face court action resulting in cancellation of the sale and money damages. - The broker misrepresents a material fact important to the buyer's decision to purchase the house. The broker's response should have been, "I don't know, but I'll find out for you." While a buyer should secure a property inspection, the broker is still responsible for the statement to the buyer. The broker does not complete a property disclosure form. The form is completed by the seller.
A broker is aware that a property near his new listing may have environmental concerns. In this situation, the environmental issues A) need to be disclosed because they can impact the value of the listing. B) do not need to be disclosed because issues outside the neighborhood have no impact on value. C) do not need to be disclosed unless they are within the property's boundaries. D) need to be disclosed only if they are not obvious and would not be easy for a buyer to discover.
A) need to be disclosed because they can impact the value of the listing. - Environmental issues, both inside and outside property boundaries, may impact value and must be disclosed no matter how obvious they are.
In regulations regarding lead-based paints for houses built before 1978, HUD requires that A) the seller is required to give all buyers a lead-based paint disclosure. B) the buyer complete a lead inspection and testing before closing. C) the broker must make sure the buyer receives the required lead-based paint disclosure. D) lead-based paint must be removed from surfaces before selling.
A) the seller is required to give all buyers a lead-based paint disclosure. - It is the seller's, not the broker's, obligation to provide the required disclosure to the buyer. The buyer may waive the inspection, and lead paint, if found, does not have to be removed.
When asked about the condition of the building foundation, a wise agent will respond, A) "I have a friend in engineering school who can give you an opinion." B) "That is beyond my expertise. You probably should discuss this with a qualified engineer." C) "The seller has lived here for more than 20 years, and she hasn't had a problem." D) "It looked fine to me."
B) "That is beyond my expertise. You probably should discuss this with a qualified engineer." - There is never a problem with referring clients and customers to someone with greater knowledge and expertise.
What is the intent of seller disclosures regarding property conditions? A) Shifts the burden onto the buyer to discover what is wrong with the property B) Helps the buyer determine what price to offer C) Encourages the broker to share in liability issues D) Assists the seller in determining a fair asking price
B) Helps the buyer determine what price to offer - After consulting the property disclosure to learn about potential problems, the age of appliances, and systems, the buyer is in a better position to make an offer based on the condition of the property.
Which of the following is TRUE regarding asbestos? A) The level of asbestos in a building is affected by weather conditions. B) The removal of asbestos can cause further contamination of a building. C) HUD requires that all asbestos-containing materials be removed from all residential buildings. D) Asbestos causes health problems only when it is eaten.
B) The removal of asbestos can cause further contamination of a building. - Removing asbestos runs a great risk of the spread of asbestos filaments or particles, thus further contaminating a building. Often, a better choice is to encapsulate the asbestos and leave it in place. Abatement must only be done by skilled, licensed contractors, not by brokerage personnel. Once disturbed, asbestos can remain suspended in the air for long periods of time. Weather does not affect the level of asbestos contamination. HUD does not require the removal of asbestos-containing materials in residential properties.
A property that has an undesirable reputation because of an event that has occurred on or near the property is A) a dangerous property. B) a stigmatized property. C) a polluted property. D) considered a physical hazard.
B) a stigmatized property. - A property that has been the site of an event such as a suicide, murder, or other undesirable event is known as a stigmatized property. The property is not necessarily dangerous or polluted because of that event.
The property disclosure form is usually given to a buyer A) after an offer is made. B) before an offer is made. C) at the initial contact with the buyer. D) at the closing of the transaction.
B) before an offer is made. - State laws may vary, but generally, the property disclosure form is given to the buyer before an offer is made. The disclosure helps to ensure that a buyer is aware of any defects or problems with a property before making an offer.
Carbon monoxide (CO) is NOT A)quickly absorbed in the body. B)easy to detect by smell. C)a natural result of combustion. D)a result of incomplete combustion.
B) easy to detect by smell. - CO is difficult for the human nose to detect because it is odorless and colorless. Many states now required CO detectors be installed in residential property. CO is a natural result of incomplete combustion when burning wood, oil, or natural gas. CO can be quickly absorbed by the body, causing lack of oxygen and resulting in dizziness, nausea, and even death.
A listing broker knows that a known sex offender lives within a block of a home she has listed. The prospective buyers are a family with three small children. The broker A) should tell the buyers that the home is under contract with another buyer. B) may have a responsibility under state law to inform the buyers of the offender's presence in the neighborhood. C) has no responsibility under any law since states release information about convicted sex offenders to the public. D) should inform the seller not to accept an offer from any families with small children.
B) may have a responsibility under state law to inform the buyers of the offender's presence in the neighborhood. - While federal law requires all states to release information about known convicted sex offenders to the public, many state laws require active notification to a buyer about a sex offender living in the area. Under fair housing laws, the broker and the seller may not discriminate in the sale of the house against a family with children.
Naturally occurring radioactive decay is caused by A) mold. B) radon. C) formaldehyde. D) carbon monoxide (CO).
B) radon. - Radon is an odorless gas caused by radioactive decay. Mold is caused by humidity. CO is carbon monoxide—a byproduct of combustion. Formaldehyde is used in home building products.
Mineral deposits that may be evidence of basement flooding and a crack in a foundation wall can both be considered A) evidence of more serious latent defects. B) red flags that warrant further investigation. C) easily repairable defects. D) patent defects that do not need to be pointed out because they should be observed by a prospective buyer.
B) red flags that warrant further investigation. - Evidence of possible water damage or a foundation problem presents a red flag that should alert a real estate agent to recommend that a buyer investigate further. The agent has that duty, whether or not the buyer sees the evidence of a possible defect.
Under the federal Lead-Based Paint Hazard Reduction Act, which statement is TRUE? A) All residential housing built prior to 1978 must be tested for the presence of lead-based paint before being listed for sale or rent. B) A lead hazard pamphlet must be distributed to all prospective buyers but not to tenants. C) A disclosure statement must be included with all sales contracts and leases involving residential properties built prior to 1978. D) Purchasers of housing built before 1978 must be given five days to test the property for the presence of lead-based paint.
C) A disclosure statement must be included with all sales contracts and leases involving residential properties built prior to 1978. Although no remediation of the property is required, a lead-based paint warning disclosure statement must be completed and signed by the parties and a copy included with any sales contract or lease for a residential property built before 1978. In the disclosure statement, buyers and renters acknowledge receiving a HUD booklet about protecting their families from lead-based paint hazards. The pamphlet "Protect Your Family From Lead in the Home" must be provided to lessees as well as to buyers. The length of time given the buyer to inspect the property is listed in the lead-based paint disclosure provided by the seller.
A broker touring a house before taking a listing notices the floor is sagging in the living room. The seller has placed a large rug over the floor. What should the broker do in this situation? A) Rely on the buyer's property inspection to discover any defect B) Take the listing and rely on the seller disclosing any defect on the property disclosure form C) Ask the seller about the sagging floor to discover if there is a structural problem with the house D) Tell the seller that the buyer is responsible for discovering any defects in the home
C) Ask the seller about the sagging floor to discover if there is a structural problem with the house - The broker is responsible for disclosing any material fact about the home to a buyer or a buyer's agent. It is the broker's duty to discover any material facts that may affect the property's value.
A buyer's agent notices that the seller's property disclosure form provided to him by the listing broker is not complete as some of the boxes indicating structural damage have not been checked. What should the buyer's agent do? A) Contact the sellers directly and question them about the form B) Advise the buyers that a property inspection will uncover any structural problems C) Contact the listing broker and request a properly completed disclosure form D) File a complaint against the sellers with the state real estate commission
C) Contact the listing broker and request a properly completed disclosure form - As the sellers are represented by a broker, the buyer's agent should contact the listing broker and request that the sellers provide a properly completed form. A property inspection may not uncover latent defects—hidden structural problems that are not easily discovered. A real estate commission investigates only complaints against real estate licensees.
A listing broker notices that a seller's property disclosure form is not signed and that some of the boxes indicating structural damage have not been checked. What should the agent do? A) Turn the form over to the property inspector to verify the condition of the property B) File a complaint against the sellers with the state real estate commission C) Question the sellers and have them sign and truthfully complete the form D) Nothing, since a property inspection will discover defects in the property
C) Question the sellers and have them sign and truthfully complete the form - A listing broker is responsible for ensuring that the seller's complete the property disclosure form and for disclosing any material facts on the property's condition to a buyer. The form is delivered to the buyer or the buyer's representative, not to the property inspector. A property inspector may not discover latent defects that should be disclosed on a property disclosure form by the buyer. The real estate commission only investigates complaints against real estate licensees.
Requiring the seller to make certain disclosures about the property is an attempt to A) increase the liability of the licensee who lists the property. B) guarantee that the buyers will not be surprised. C) avoid unpleasant surprises for the buyer. D) provide a warranty to the buyers.
C) avoid unpleasant surprises for the buyer. - The use of seller disclosure statements is an attempt to reduce unpleasant surprises for the buyer. Seller disclosures are neither warranties nor guarantees; the seller can only disclose that of which the seller is aware. Buyers should rely on their own inspections.
While looking at a property, the potential buyers ask their salesperson if a fence is the boundary line of the property. The salesperson should recommend that the buyers A) ask the owners of the property. B) ask the neighbors. C) have a survey conducted. D) read the legal description.
C) have a survey conducted. - To determine the exact boundaries of a property, a survey is recommended. Some lenders require a survey to confirm the legal description of the property. The owners and the neighbors may not know the exact boundaries of the property.
On discovering a latent defect in a property, a salesperson should discuss the problem with the seller and then A) arrange for the repairs. B) tell the seller that the defect must be repaired. C) inform any prospective buyers of the defect. D) contact the city building inspector about the defect.
C) inform any prospective buyers of the defect. - A salesperson or broker is also expected to disclose information about material defects in the property to prospective buyers. The seller is not required to correct the defects, but the salesperson should inform the seller that not repairing the defects may result in lower offers from buyers. The salesperson should not arrange for repairs without explicit instructions from the seller and is not required to contact a city inspector about the defect. The salesperson should be sure that the defect is included in any property inspection report to the buyer if not corrected by the seller.
A listing broker discovers a latent defect in the home, which the seller has not disclosed on the seller's property disclosure form. The broker A) is not required to disclose defects that the seller does not indicate on the property disclosure form. B) should trust that the buyer's property inspection will discover the defect. C) must disclose the defect to the buyer or the buyer's representative. D) should report the seller to the state real estate commission.
C) must disclose the defect to the buyer or the buyer's representative. - It is the broker's duty to discover any material facts that may affect the home's value, whether or not they are disclosed by the seller. The material facts must be disclosed to prospective buyers. A buyer's property inspection may not discover a latent defect that a seller does not disclose and does not relieve the agent of the responsibility to disclose the defect.
All of the following are true about asbestos EXCEPT A) it was commonly used as insulation. B) it is most dangerous when airborne. C) removal can cause further contamination of a building. D) HUD requires all residential buildings be tested for asbestos-containing materials.
D) HUD requires all residential buildings be tested for asbestos-containing materials. - The federal government does not require asbestos testing in residential buildings. Asbestos was commonly used as insulation prior to 1978. Asbestos is harmful only if it is disturbed or exposed as can occur during remodeling or renovations. Tiny airborne particles when inhaled can cause a variety of respiratory diseases. Federal government regulations establish guidelines for owners of public and commercial buildings to test for asbestos-containing materials. The removal process, though, requires state-licensed technicians and specially sealed
The seller's property disclosure form yields which of the following benefits for the transaction? A) It informs the buyer as to which defects exist. B) It provides a basis for further investigation by the buyer. C) It allows the buyer to make an informed decision as to buying the property. D) It gives the buyer full knowledge of all issues with the property.
D) It gives the buyer full knowledge of all issues with the property. - The seller's property disclosure does not act as an inspection and gives the buyer full knowledge of the seller's representation of the issues asked on the form. The seller's property disclosure form provides all of the benefits shown for the buyer. It may also provide a more concrete basis for litigation if the buyer can determine that a seller filled out the form incorrectly or failed to disclose a defect the seller knew was material to the transaction.
A homeowner received estimates that ranged between $20,000 and $25,000 for repairing damage caused by water leaking into the basement. The owner couldn't afford the repairs, so he constructed a false floor over the entire basement and installed carpet over the floor to conceal the damage. When he listed the house, he did not disclose the leak or the damage to the basement on the property disclosure form. The basement damage is an example of A) a patent defect, and the brokerage firm may be liable for not discovering the false floor and the damage. B) a latent defect, and the listing brokerage firm may be liable for not discovering the false floor over the damage. C) a patent defect, and the brokerage firm is not liable for not discovering the false floor and the damage. D) a latent defect, and the listing brokerage firm is not liable for not discovering the false floor over the damage.
D) a latent defect, and the listing brokerage firm is not liable for not discovering the false floor over the damage. - the listing brokerage firm is not liable for not discovering the false floor over the damage. The basement damage is a hidden structural defect known to the seller but not known to the brokerage firm or those working for the firm or to a purchaser. Real estate professionals are not liable for discovery and disclosure of latent defects not disclosed by the purchaser. Patent defects are property defects that are easily visible when inspecting a property.
To protect the buyer, many states require A) a property survey. B) a buyer's independent property inspection. C) a broker's certification of property condition. D) a seller's property condition disclosure.
D) a seller's property condition disclosure. - Most states require that the seller truthfully complete a seller's property condition disclosure statement. Some states use mandated disclosure forms. While states do not require property inspections, buyers should secure their own independent property inspection to ensure they know the actual condition of the property. A property survey determines the exact boundaries of a property but does not note the condition of the property.
Property managers must be aware and knowledgeable of a variety of issues. When considering asbestos, radon, and urea-formaldehyde, the manager should be aware they are all A) produced as a result of the natural decay of radioactive substances. B) classified as hazardous substances. C) produced as a result of the natural decay of organic substances. D) classified as environmental hazards.
D) classified as environmental hazards. - Asbestos, radon, and urea-formaldehyde are all environmental hazards. Hazardous substances are materials such as paint, cleaners, and chemicals used in the property. Radon is radioactive, but asbestos and urea-formaldehyde are not. None of the listed hazards are organic; an example of an organic substance would be mold.
Hidden defects, which are not easily discovered during a property inspection, are called A) material facts. B) observable defects. C) fraudulent defects. D) latent defects.
D) latent defects. - A latent defect is a hidden structural defect that is not easily discovered during a property inspection. A material fact is any fact relevant to a person making a decision to buy a property. An observable defect is one that can be seen. Fraudulent defects are those that are concealed or hidden by fraud or misrepresentation.
A broker discovers the previous owner of a home she has listed died of AIDS. The broker A) must disclose the fact to prospective buyers. B) should consult an attorney to determine if the fact creates a stigmatized property. C) may disclose the fact if asked by a prospective buyer. D) may not disclose that the previous owner died of AIDS.
D) may not disclose that the previous owner died of AIDS. - A disclosure that a property owner or occupant died of AIDS is illegal discrimination against the handicapped under the federal Fair Housing Act.
All of the following are true about radon EXCEPT A) it is colorless, odorless, and tasteless. B) radon levels can be reduced by installing ventilation systems. C) radon levels will vary in certain weather conditions. D) modern home construction reduces the potential for radon gas accumulation.
D) modern home construction reduces the potential for radon gas accumulation. - Radon is a colorless, odorless, and tasteless radioactive gas. The risk of radon increases as it builds up in an enclosed space because of inadequate ventilation. Modern, energy-efficient homes and buildings with practically airtight walls and windows may increase the potential for radon gas accumulation. Once radon accumulates in a basement or crawl space, efficient heating and ventilation systems can rapidly spread the gas throughout the building. Rain, colder weather, and high winds can cause an increase in the accumulation of radon within a structure. Radon is mitigated by ventilating outside the home.