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Louisiana Property Disclosure Basics

Property/seller disclosure forms are key tools used in a real estate transaction. This disclosure form provides buyers with baseline knowledge of the condition of the home prior to purchase based on questions asked in the disclosure. Sellers who make good faith disclosures also stand a better chance of protecting themselves from after sale problems.

The Property Disclosure Act signed by Louisiana Governor Mike Foster in 2003 required the Louisiana Real Estate Commission (LREC) to promulgate an approved residential property disclosure form by April of 2004. LREC's form applies to all transactions entered into on or after July 1, 2004. Any necessary amendments to the form are made by LREC on an annual basis.

With a mandatory disclosure form in place, Louisiana buyers are better informed on the conditions of a home, sellers can further protect their sale, and agents and brokers can better facilitate knowledge about a home more accurately and concisely to the home-buying public.

WHO IS REQUIRED TO MAKE DISCLOSURE?

A seller is obligated to provide a property disclosure document whenever there is any transfer of any interest in residential real property, whether by sale, exchange, bond for deed, lease with option to purchase, etc. A seller's obligation to furnish a property disclosure document applies whether or not the assistance of a real estate licensee is utilized.

"Residential real property" is defined as one to four buildings or structures occupied or intended for occupancy as single family residences. Commercial property and vacant lots are not included in the definition of residential real property.

ARE ANY PROPERTY TRANSFERS EXEMPT FROM THE DISCLOSURE REQUIREMENTS?

The following transfers are exempt from the requirement to provide a property disclosure document:

• Court-ordered transfers
• Transfers to a lender by a borrower who is in default
• Transfers by a lender who has acquired the property at a foreclosure sale or who has acquired the property by deed in lieu of foreclosure
• Transfers by a fiduciary in the course of administration of a decedent's estate, guardianship, conservatorship or trust
• Transfers of newly-connstructed property
• Transfers from one or more co-owners solely to one or more of the remaining owners
• Transfers pursuant to a will or a succession
• Transfers of property that will be converted into a use other than residential
• Transfers of property to a spouse or relative in the blood line
• Transfers between spouses resulting from a judgment or divorce or separate maintenance
• Transfers to or from any governmental entity
• Transfer from an entity that has acquired title or assignment of a real estate contract to assist the owner in relocation, (as long as the entity makes available certain disclosure documents)
• Transfer to an inter vivos trust
• Acts that, without chaning ownership, connfirm, correct, modify or supplement a deed or conveyance already recorded

WHAT IF THE SELLER DOES NOT KNOW SOME OF THE INFORMATION REQUIRED BY THE DISCLOSURE FORM?

If the seller has no knowledge or information required by the disclosure form, the seller simply has to indicate this on the disclosure form.

IS THE PROPERTY DISCLOSURE DOCUMENT CONSIDERED TO BE A WARRANTY?

A property disclosure document is NOT considered a warranty by the seller. The information contained within the documennt is for disclosure purposes only and is not intended to be part of any contract between the purchaser and seller. Property disclosure documents may not be used as a substitute for any innspections or warranties that the purchaser or seller may obtain. Nothing in the law precludes the rights of a purchaser to inspect the physical condition of the property.

WHERE CAN I FIND THE LOUISIANA PROPERTY DISCLOSURE FORM?

The latest version of the Louisiana Residential Property Disclosure form can be downloaded at the Louisiana Real Estate Commission website (Go to http://www.lrec.state.la.us and click on "Forms"), or you can contact the Commission at (225) 765-0191 to request a form.

SOURCE: Louisiana REALTORS Association, Louisiana Real Estate Commission

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