Ch. 33 - Disclosures, Notices, and Inspections

Bob is buying the property "as is" but still want the protection offered by a home inspection. What addendum should his agent use when preparing the Contract of Sale?

"As Is" With Inspection(s) and Right to Terminate Addendum

How long do homebuyers have to conduct a paint inspection or risk assessment for lead-based paint or lead-based paint hazards?

10 days

Which of the following areas is NOT included in a termite inspection?

10 feet surrounding the residence

The federal Residential Lead-Based Paint Hazard Reduction Act of 1992 pertains to residential property with 1 to 4 units that were built before:

1978.

Radon

A cancer-causing natural radioactive gas that you cannot see, smell, or taste

Megan's law.

A federal law designed to prevent crimes against children.

Mold

A fungus that reproduces by means of spores.

Common ownership community.

A group of homes with an association and their own binding rules.

Private well

A hole drilled into the ground to access water contained in an aquifer.

Latent defect

A material defect that is not readily ascertainable by a reasonable visual inspection of the property.

Asbestos.

A mineral fiber, which has been found to cause lung and stomach cancer

Septic system

A self-contained, onsite, underground wastewater treatment system.

Unit.

A three-dimensional space identified in the declaration and on the condominium plat and shall include all improvements contained within the space.

Polybutylene piping.

A type of pipe used for the plumbing systems in homes built between 1978 and 1995 that tends to deteriorate and leak potentially causing extensive damage to property.

In Maryland, which of the following is NOT a notice and/or disclosure that may be required by lenders or is necessary to comply with various state or federal laws?

Alarm for volcanic activity

Common elements.

All of the condominium, except the units.

Carbon monoxide

An odorless gas produced whenever any fuel is burned.

Lot

Any plot or parcel of land on which a dwelling is located or will be located within a development.

A common ownership community (COC) is a group of homes with an association and their own binding rules. Which is NOT a type of common ownership community?

Apartment complex

Resale disclosure certificate.

Certificate that contains additional information about the condominium association and the unit being sold.

Resale package.

Copies of the governing documents.

Statutory disclosures

Disclosures that are required by statute or law.

Under Maryland law, which of the following do real estate licensees and owners of real property have to disclose to a prospective purchaser?

Flood zone

The federal law that requires non-resident aliens and foreign corporations to pay U.S. income tax on gains from the sale of U.S. real property interest is called the:

Foreign Investment in Real Property Tax Act

Which of the following statements regarding home inspections is INCORRECT?

Home inspections are performed by licensed appraisers.

Target housing

Housing for the elderly and vacation housing.

Licensees should ask all of the following questions when reviewing disclosure laws, EXCEPT:

How much will the disclosure cost?

Which statement regarding common ownership communities is INCORRECT?

In a condo, the members own their homes and the land the homes sit on.

"As Is" language

Language in a contract that gives notice of latent defects and means that the buyer accepts the property in the condition in which it is reasonably observable by him or her.

Several hazardous substances, materials, or products might be found on a property that can affect its use. Which hazardous substance is a fungus that reproduces by means of spores?

Mold

Development

Property subject to a Declaration in a homeowners association (HOA).

Condominium

Property subject to the condominium regime established by the Condominium Act.

Stigmatized property

Property that has been psychologically impacted by an event that occurred, or was suspected to have occurred, on the property, such event being one that has no physical impact of any kind.

Common areas

Property that is owned or leased by the homeowners association (HOA).

Several hazardous substances, materials, or products might be found on a property that can affect its use. Which hazardous substance is a natural radioactive gas that you cannot see, smell, or taste?

Radon

Which statement is CORRECT about the Residential Property DISCLAIMER Statement?

Real estate licensees do NOT complete the Residential Property Disclaimer Statement.

When a person buys a condominium unit, the seller must provide a complete and accurate Resale Package and Resale Disclosure Certificate to the buyer 15-days prior to closing. What document is NOT included in the Resale Package?

Rules and Regulations of the Commission

Residential Property Disclaimer Statement

Statement that the seller is selling the property "as is" and makes no representations or warranties as to the condition of the property or any improvements on the real property, except as otherwise provided in the contract of sale, or in a listing of latent defects.

Residential Property Disclosure Statement

Statement used to disclose defects or other information about the condition of the real property actually known by the seller.

What is a property that has been psychologically impacted?

Stigmatized property

Caveat emptor

The Latin phrase meaning "let the buyer beware."

Inspection contingency date

The date by which an inspection contingency expires.

Governing documents

The declaration (other than the plats), the bylaws, and the rules or regulations.

Which statement regarding making disclosures is INCORRECT?

The disclosure process is identical for all disclosures

Unit owner.

The person who holds legal title to a unit in a condominium.

Who is required to collect the Maryland non-resident seller tax at closing and remit payment along with the deed?

The title company or settlement agent

When do sellers use the Residential Property DISCLAIMER Statement?

When they are selling the property "as is."

The purpose of disclosure is to ensure that:

all parties in the real estate transaction have sufficient information to make informed decisions.

The D/D Statement provided by the Maryland Real Estate Commission must be completed and provided to:

all potential buyers before they become obligated to buy the seller's property.

The condominium Resale Disclosure Certificate contains additional information about the condominium association and the unit being sold. The unit owner must:

disclose whether any unit alterations or renovations were made in accordance with condo policies.

The purpose of the one-page "Lead Warning Statement" is:

for the new owner to acknowledge that lead may exist on the property.

The "Maryland Residential Property Disclosure and Disclaimer Statement" form provided by the Maryland Real Estate Commission:

has two parts—disclosure or disclaimer.

Unless delivered to the appropriate party, disclosures are:

ineffective.

The Residential Property DISCLOSURE Statement includes questions about any non-defect issues such as all of the following, EXCEPT:

insulation.

Lenders usually require that current termite infestation or damage be corrected prior to the closing of the transaction. The cost of correction is usually paid for by the seller:

not to exceed 2% of the purchase price.

Knowing when to disclose is just as important as making the disclosure itself. Usually, the timing of the disclosure is based on:

statute or the contract.

The seller of a home that is part of an HOA must give the prospective buyer a resale package. If the buyer does not get the resale package at least 5 days before signing the contract:

the buyer has 5 days to cancel the contract after receiving the package.