Section 6. Pt.2: Environmental Concerns and Disclosures in DE
In Delaware, radon disclosure is made using the
Radon Rights, Risks and Remedy for the Home Buyer document and the Radon Disclosure form.
When you make recommendations to your client to have testing done, you should keep a record of the recommendation as well as the client's written response as proof that you have done your part to make your client aware of the possibility for issues. (T/F)
True
Provide the buyer with an EPA lead disclosure pamphlet. (T/F)
True When selling residential property built prior to 1978, the buyer must be provided with a copy of the EPA informational pamphlet describing the hazards of lead-based paint. The known presence of lead-based paint must also be disclosed. These actions are required of sellers, landlords, and real estate agents.
Is the following statement true or false? In Delaware, the disclosure of material facts is mandatory under the Buyer Property Protection Act.
True. By law, this disclosure must be written and signed by the seller.
Radon Testing and Disclosure
Unless otherwise exempted, all property sellers must disclose to potential buyers that the property being sold may potentially expose the buyers to radon. Sellers must also provide any radon testing or inspection reports and notify buyers if there are any known hazards.
Which statement best describes how covenants, deed restrictions, or conditions may address solar systems on residential properties in Delaware?
Unreasonable restrictions of solar systems are void and unenforceable
A Delaware homeowner wants to install a wind turbine on his single-family residential property. The property is located in a community with covenants and deed restrictions enforced by the homeowners association. Which of these statements is most accurate?
Wind turbine installation can't be prohibited by county or municipal governments or by the homeowners association.
Because not all environmental hazards are easily detected, you have an obligation to your client to recommend that the ____, ____, and ____ be tested, especially where commercial property is concerned.
soil, air, and water
If you represent a buyer of a commercial or industrial property, you should strongly recommend having a professional environmental audit done. (T/F)
True
Make certain that all parties sign and date the Lead Warning Statement. (T/F)
True
Material facts are known conditions that may affect subsequent owners' health and/or safety. (T/F)
True
Sellers must complete and sign the Seller's Disclosure of Real Property Condition Report form before signing the listing agreement. (T/F)
True
The Buyer Property Protection Act is a section of state law that outlines property disclosure requirements. (T/F)
True
The Seller's Disclosure of Real Property Condition Report form is the standard property disclosure form used in Delaware. (T/F)
True
What does the § 8060 of Title 25 of the Delaware Code say about wind turbines?
"No county or municipal government, homeowner association, or association formed for the management of commonly-owned elements and facilities or for regulating use of private property shall adopt any covenant, restriction, deed restriction, zoning restriction, or subdivision restriction which prohibits or restricts the owner of a property from using a system for obtaining wind energy for a residential single-family dwelling unit." Any restrictions to this effect adopted after August 8, 2009 are automatically void and unenforceable. Any restrictions to this effect adopted before August 8, 2009 aren't "effective and no conditional use or other zoning review process shall be required." While property owners can't be prohibited from installing a wind turbine, local zoning ordinances may restrict turbines to a certain height.
The sellers' agents of any commercial and industrial properties are required to disclose any known environmental hazards. (T/F)
True
You can get your home tested for lead in several different ways:
-A lead-based paint inspection tells you if your home has lead- based paint and where it is located. It won't tell you whether your home currently has lead hazards. A trained and certified testing professional, called a lead-based paint inspector, will conduct a paint inspection using methods, such as: Portable x-ray fluorescence (XRF) machine • Lab tests of paint samples A risk assessment tells you if your home currently has any lead hazards from lead in paint, dust, or soil. It also tells you what actions to take to address any hazards. A trained and certified testing professional, called a risk assessor, will: -Sample paint that is deteriorated on doors, windows, floors, stairs, and walls -Sample dust near painted surfaces and sample bare soil in the yard -Get lab tests of paint, dust, and soil samples -A combination inspection and risk assessment tells you if your home has any lead-based paint and if your home has any lead hazards, and where both are located.
Buyers of certain residential homes must be allowed an opportunity to conduct a paint inspection or risk assessment for lead-based paint hazards. Which four of these items are true about this requirement?
-Buyers may waive this opportunity. -Standard time period allowed for inspection is 10 days. -Changes to the inspection period must be mutually agreed upon in writing. -This is not applicable to homes built after 1978.
If you think your home has lead-based paint:
-Don't try to remove lead-based paint yourself. -Always keep painted surfaces in good condition to minimize deterioration. -Get your home checked for lead hazards. - Talk to your landlord about fixing surfaces with peeling or chipping paint. -Regularly clean floors, window sills, and other surfaces. -Take precautions to avoid exposure to lead dust when remodeling. -When renovating, repairing, or painting, hire only EPA- or state- approved Lead-Safe certified renovation firms. Before buying, renting, or renovating your home, have it checked for lead-based paint. Consult your health care provider about testing your children for lead. Your pediatrician can check for lead with a simple blood test. -Wash children's hands, bottles, pacifiers, and toys often. -Make sure children eat healthy, low-fat foods high in iron, calcium, and vitamin C. -Remove shoes or wipe soil off shoes before entering your house.
Solar systems can be pricey but homeowners have both purchase and lease options by:
-Purchasing, the homeowner owns the system outright. Some states may even provide loans to help with the cost of purchasing the system. Once installed, the system is a fixture of the property (this is true in both purchase and lease situations). That means, if the homeowner eventually sells the property, the system will stay and transfer with the property. -Leasing, the homeowner enters into a contract with a third party who owns and installs the system. The contract is usually in the form of a lease or power purchase agreement (PPA). With a lease, the homeowner usually pays a flat monthly lease rate and has the right to use all the energy the system generates. Often, the lease is for 20-25 years. With a PPA, the homeowner purchases all the energy generated at a specified price per kilowatt-hour. The existence of a system lease or PPA may complicate a real estate transaction. This information must be disclosed to prospective homeowners who may need to assume the agreement terms (unless the homeowner pays off the remaining lease payments). This could have an impact on the buyer's mortgage qualification. Sellers should review the terms of their lease or PPA so that proper information can be disclosed to prospective buyers. Buyers should also carefully review the terms to understand what financial obligations related to the system they'd be responsible for upon purchasing the property.
Before renting or buying a pre-1978 home or apartment, federal law requires:
-Sellers must disclose known information on lead-based paint or lead- based paint hazards before selling a house. -Real estate sales contracts must include a specific warning statement about lead-based paint. Buyers have up to 10 days to check for lead. -Landlords must disclose known information on lead-based paint or lead-based paint hazards before leases take effect. Leases must include a specific warning statement about lead-based paint
Before renting or buying a pre-1978 home or apartment, federal law requires:
-Sellers must disclose known information on lead-based paint or lead- based paint hazards before selling a house. -Real estate sales contracts must include a specific warning statement about lead-based paint. Buyers have up to 10 days to check for lead. -Landlords must disclose known information on lead-based paint or lead-based paint hazards before leases take effect. Leases must include a specific warning statement about lead-based paint.
The following transfers are exempt from the Seller's Disclosure of Real Property Condition Report requirement:
-Transfers between spouses after a divorce -Transfers to/from a government entity -Transfers to a mortgagee by a mortgagor in default using a deed in lieu of foreclosure -Transfers by a fiduciary in the course of that person's administration of a decedent's estate, guardianship, or trust, if the executor/administrator is the seller -Transfers under a court order -Transfers made to a spouse or to a person or persons in the line of consanguinity of one or more of the transferors -Transfers by a sheriff's sale for defaulting on an obligation secured by a mortgage, judgment, tax, or other lien -Transfers from one co-owner to one or more co-owners
In some cases, residential property transfers are exempt from the requirement to provide the Seller's Disclosure of Real Property Condition Report. In such cases, if a Delaware licensee is involved in the transaction, a property disclosure exemption form must be completed instead. Look at the following situations, and determine which would require the property disclosure exemption form instead of the Seller's Disclosure of Real Property Condition Report?
-With the assistance of a real estate agent, Harry transfers the property he owned with his wife, Marge, to her, under the terms of their divorce. -Licensee Luke helps transfer a property to Jane under a court order. -Real estate licensee Glenda helps Wes complete the necessary paperwork to transfer a property he owns to his wife.
Disclosing Environmental Hazards
-You are presumed to have specialized knowledge of real estate, and that extends to being cognizant of the environmental issues that can occur. -It's important that you know where, when and how to seek assistance from the experts: environmental technicians, assessors, and auditors. -Testing of soil, air, and water are prudent steps to take in the due diligence process. If you recommend these tests to your client and your client decides not to follow through with them, you have at least done your part to make your client aware of the possibility of issues. Be sure to keep records of any such recommendations, with a written response from your client. -Part of your role as a real estate expert is the responsibility to disclose any environmental issues to all parties in a transaction. -Sellers of commercial and industrial properties, on the other hand, have no such legal obligation to disclose known hazards. However, as a licensee, you're held to higher standards than the seller is. -For example, let's say the property is a warehouse and it was the site of a hazardous chemical spill. The seller knows this, but has no obligation to disclose it to a buyer. The agent doesn't know about it, so has no obligation to disclose it. But if the seller tells the agent about it, then the agent does have an obligation to disclose, although the seller still doesn't have that obligation because it's commercial property, not residential.
Lead poses health problems and it may be present in paint manufactured prior to _____
1978
Sellers and landlords of properties built prior to ______ must provide the buyer with a lead-based paint disclosure as well as an EPA pamphlet describing how to minimize the dangers of lead.
1978
Which of the following real estate transfers is exempt from the requirement to provide the Seller's Disclosure of Real Property Condition Report in Delaware?
A single-family home transferred to or from a government entity
Which of the following Delaware residential real estate transactions is exempt from the requirement to provide the Seller's Disclosure of Real Property Condition Report?
A transfer by Juan in his duties as the administrator of Horace's trust
Exempt Property Certification
Although most residential property transfers of one to four units require that the seller complete the Seller's Disclosure of Real Property Condition Report form, there are certain situations in which this form is not required. In these cases-provided there's a Delaware real estate licensee involved in the transaction-the Seller's Disclosure of Real Property Condition Report: Exempt Property Certification form (also known as the property disclosure exemption form) must be completed. Buyers and sellers must sign this form, certifying that the transfer is exempt. This form outlines the transfers that are exempt from the requirement to provide the Seller's Disclosure of Real Property Condition Report form under Chapter 25, Title 6, Section 2577 of the Delaware Code. The seller must circle each item number on the form that qualifies the property for the exemption.
The disclosure of material defects can be provided verbally or in writing. (T/F)
False
The Delaware Department of Health and Social Services' Division of Public Health created the Radon Disclosure form. (T/F)
False The Delaware Real Estate Commission created the Radon Disclosure form.
Green Energy in Delaware- Wind Turbine
Delaware Regulations for the Green Energy Program defines a wind turbine as "a mechanical/electrical system that converts the kinetic energy of blowing wind into mechanical or electric power." Wind power is considered a green energy source, but the energy benefits are often weighed against the impact on property values a visible wind turbine may have. Wind turbines in the line of sight (some towers are more than 400 feet tall) can reduce property value because they impact the natural horizon and landscape.
As a licensee, you are only legally responsible to disclose issues that you know about and not those that perhaps you should have known about but didn't because your client hid them from you. (T/F)
False
Because you are a well-trained professional, you are expected and legally obligated to detect any and all environmental issues and hazards that may impact the sale or purchase of a property. (T/F)
False
Have property inspected by a qualified lead renovation expert. (T/F)
False
If you recommend to your client that the soil, air, and water be tested, the client is legally obligated to pay to have the tests done. (T/F)
False
If your client specifically asks you not to disclose an environmental issue, you are not legally obligated to do so. (T/F)
False
Inform the EPA if lead-based paint is present on the property. (T/F)
False
A week after your seller client accepts an offer, there's a hard freeze, and a pipe in the home bursts, causing some minor flooding damage. Your client gets a plumber to repair the pipe but doesn't do much to repair the other damage. What's your responsibility in this situation?
Immediately have your client make written disclosure of the issue and alert the buyer's agent.
Delaware's Disclosure Forms
In virtually all states, known conditions that may affect subsequent owners' health and/or safety are material facts that must be disclosed. This applies to conditions that might not be readily discovered or easily seen by a potential buyer, such as the known presence of asbestos. Before you can make complete disclosures and have confidence that your clients have done the same, you need to understand what, when, and how disclosures should be made. Make it a point to learn and follow correct material fact disclosure procedures and advise your seller clients of their disclosure responsibilities pertaining to material facts. Failure to disclose material facts is considered fraud, and it can land you and your seller clients in court. It doesn't matter whether charges are dismissed or upheld-if a case is brought against you, you're sure to lose considerable time and money. Protect yourself by getting all disclosures in writing.
Your client, Eric, is interested in purchasing an industrial property to start a new business. You've recommended that soil, air, and water testing be done, but Eric is on a tight budget and doesn't feel these tests are necessary. What should you do?
Keep records of your recommendations and a written response from Eric.
Disclosing Lead-Based Paint Hazards
Lead was (and, in some countries, still is) used in paint to speed up drying, increase durability, maintain a fresh appearance, and resist moisture that causes corrosion. In the U.S., lead paint was banned from household use in 1978; however, many older homes still contain lead paint. Because of its health hazards, sellers of homes built prior to 1978 must provide buyers with a lead-based paint disclosure form. Let's look at the requirements for disclosure and when they apply.
Federal Requirements for Lead Disclosure
Pamphlet: Give them an Environmental Protection Agency-approved information pamphlet titled "Protect Your Family From Lead in Your Home," which outlines how to identify and control lead-based paint hazards. Known information: Disclose any known information concerning lead-based paint or lead-based paint hazards. The seller or landlord must also disclose information, such as the location of the lead-based paint and/or lead-based paint hazards, and the condition of the painted surfaces. Records and reports: Provide any records and reports on lead-based paint and/or lead-based paint hazards, which are available to the seller or landlord. For multi-unit buildings, this requirement includes records and reports concerning common areas and other units when such information was obtained as a result of a building-wide evaluation. Lead warning statement: Include an attachment to the contract or lease (or language inserted in the lease itself) which includes a lead warning statement and confirms that the seller or landlord has complied with all notification requirements. This attachment is to be provided in the same language used in the rest of the contract. Sellers or landlords, and agents, as well as home buyers or tenants, must sign and date the attachment. Ten-day risk assessment/inspection period: Sellers must provide home buyers with a 10-day period to conduct a risk assessment for lead-based paint or lead-based paint hazards. Parties may mutually agree, in writing, to lengthen or shorten the time period for the inspection. Homebuyers may waive this inspection opportunity.
Radon Disclosure Forms
Radon disclosure is made using the following documents: -Radon Rights, Risks and Remedy for the Home Buyer: The Delaware Department of Health and Social Services' Division of Public Health created this informational document to educate buyers about the risks associated with radon exposure, encourage buyers to have radon testing performed, and provide buyers with resources for additional information. This form can be provided to a buyer by the buyer's agent, and should accompany the seller's Radon Disclosure form as well. -Radon Disclosure: The Delaware Real Estate Commission created this form, which sellers use to disclose any known presence of radon in the home. Licensees must obtain this form from the seller before signing a listing agreement. The seller and buyer must both sign this form.
If undertaking renovations, repairs, or painting (RRP) projects in your pre-1978 home or apartment:
Read EPA's pamphlet, The Lead-Safe Certified Guide to Renovate Right, to learn about the lead-safe work practices that contractors are required to follow when working in your home (see page 12). In addition to day-to-day cleaningand good nutrition, you can temporarily reduce lead-based paint hazards by taking actions, such as repairing damaged painted surfaces and planting grass to cover lead- contaminated soil. These actions are not permanent solutions and will need ongoing attention. If you hire a contractor to conduct renovation, repair, or painting (RRP) projects in your pre-1978 home or childcare facility (such as pre-school and kindergarten), your contractor must: Be a Lead-Safe Certified firm approved by EPA or an EPA-authorized state program Use qualified trained individuals (Lead-Safe Certified renovators) who follow specific lead-safe work practices to prevent lead contamination Provide a copy of EPA's lead hazard information document, The Lead-Safe Certified Guide to Renovate Right
Reina will be listing a property for the Sullivans, so she gives them a ______ form and instructs them to complete it to the best of their knowledge before they sign a listing agreement.
Seller's Disclosure of Real Property Condition Report
Which form would the seller (who is the property developer) use to make legally required disclosures for a newly constructed home in a Delaware subdivision?
Seller's Real Property Condition Report - New Construction Only
Green Energy in Delaware- Solar
Solar energy systems turn sunlight or solar radiation, often captured through panels, into energy or electricity. Solar energy is clean and sustainable, which makes it attractive to consumers. The solar industry is growing at an incredible rate for many reasons, according to the U.S. Department of Energy. Not the least of which is the savings homeowners who have solar power see in their utility bill.
The Seller's Disclosure of Real Property Condition Report
The Seller's Disclosure of Real Property Condition Report form is the standard property disclosure form used in Delaware. The form is quite comprehensive, covering 15 categories and consisting of almost 200 questions. Categories include: -Deed Restrictions, Homeowners Associations/Condominiums and Co-Ops -Environmental Hazards -Structural Items -Termites, Dryrot, Pests Roof -Plumbing-Related Items -Heating and Air Conditioning -Major Appliances and Other Items Sellers must complete and sign the disclosure form before signing the listing agreement. The listing agent (or the seller, if the seller isn't represented) is responsible for making sure prospective buyers get a copy prior to making an offer by giving it to either the buyer or to the buyer's agent. Once the buyer signs the disclosure form, it becomes a part of the purchase agreement.
Which of the following parties must sign the Radon Disclosure form after it's been completed?
The buyer and the seller
A Delaware homeowner leases a roof-mounted solar system and pays a monthly rental rate to a third party. There are seven years remaining on the lease term. The homeowner is preparing to list the property for sale. Which statement best describes the homeowner's obligations related to the system?
The system is considered a fixture that must be disclosed by the homeowner, in addition to the terms of the lease which may need to be assumed by the buyer.
The Buyer Property Protection Act
Title 6, Chapter 25, Subchapter VII of the Delaware Code is known as the Buyer Property Protection Act. This section of state law outlines property disclosure requirements, including strict radon testing and disclosure guidelines. The act reiterates that disclosure of material defects, in writing and signed by the seller, is mandatory.
Although the seller has the primary responsibility and liability to disclose an issue, as the seller's representative, you can also be held liable if issues are not disclosed. (T/F)
True
As a licensee, if you or your client discovers an environmental issue, you have a responsibility to disclose any such issues to all parties in a transaction. (T/F)
True
As a licensee, you are not expected to discover or uncover environmental issues associated with a property; however, you are expected to know where, when, and how to seek assistance from the experts. (T/F)
True
Because not all environmental hazards are easily detected, you have an obligation to your client to recommend that the soil, air, and water be tested, especially where commercial property is concerned. (T/F)
True
Both the buyer and seller must sign the Seller's Disclosure of Real Property Condition Report form. (T/F)
True
Disclose the presence of lead-based paint on the property if known. (T/F)
True
In residential property transfers that are exempt from the requirement to provide the Seller's Disclosure of Real Property Condition Report, the property disclosure exemption form is required when........
a real estate licensee is involved in the transaction.
Which of these is a Delaware listing agent's responsibility? a. Complete the seller's property disclosure form prior to entering into a listing agreement. b. Give the seller's completed property condition disclosure form to all prospective buyers or their agents. c. Inform prospective buyers that the seller disclosures should be supplemented by a professional property inspection. d. Inspect the seller's property for potential material defects that would require disclosure to prospective buyers.
d.
As a licensee, if you or your client discovers an environmental issue, you have a responsibility to...
disclose any such issues to all parties in a transaction.
The Seller's Disclosure of Real Property Condition Report form is the standard property disclosure form used in........
most residential real estate transfers in Delaware
In 2019, § 318, Title 25 of the Delaware Code was amended, making it easier for residential property owners subject to covenants or deed restrictions to install....
solar systems. The amendment makes "any covenant, restriction, or condition contained in a deed, contract or other legal instrument which affects the transfer, sale or any other interest in real property that effectively prohibits or unreasonably restricts the owner of the property from installing or using a roof mounted system for obtaining solar energy on that owner's property is void and unenforceable." The key phrase in this previous passage is 'unreasonably restricts.' The above amendment does NOT remove reasonable restrictions which are "those restrictions that do not significantly increase the cost of the system or significantly decrease its efficiency or specified performance, or that allow for an alternative system of comparable cost, efficiency, and energy conservation benefits." Additionally, reasonable restrictions can be amended to allow solar systems through a majority vote (previously 2/3 vote was needed).
Sellers must complete and sign the Seller's Disclosure of Real Property Condition Report form before signing...
the listing agreement. Once the buyer signs, the form becomes part of the sales contract.