PROPERTY CONDITION DISCLOSURE FORMS: HOW THE REAL ESTATE INDUSTRY EASED THE TRANSITION FROM CAVEAT EMPTOR TO "SELLER TELL ALL"

Typically, forms inquire about heating and air conditioning, plumbing and electrical systems. One state requires the following disclaimers: "What is the type of sewage system? . . . When was the on-site sewage disposal last serviced? ... Is there a sewage pump?" Are the plumbing pipes copper, galvanized, lead, or PVC?165

Title questions appear on a minority of forms, such as how long the seller has occupied the house, whether the seller knows of existing lawsuits concerning the property, boundary or lot line disputes, whether the property is leased, whether there is a homeowners' association, any easements other than utility easements, any encroachments upon neighboring properties or of neighboring structures upon the subject property, or any planned road widenings.166 A minority of forms also ask the seller to indicate the zoning classification, zoning violations, non-conforming uses, variances or conditional use permits, violations of setback requirements, and additions or conversions possibly made without building permits.

Some forms inquire about natural hazards, such as whether the property is within a Federal Emergency Management Agency ("FEMA") designated flood plain, or is located on or near an earthquake fault zone, a seismic safety zone, a wetland, a coastal barrier zone,167 or an area of high fire-risk, or contains radon,168 asbestos, lead-based paint,169 or mold-contamination.170

D. Should Property Condition Disclosure Forms Be Exhaustive or Abbreviated?

One might assume the shorter the form, the better off the seller is because shorter forms are quicker and easier to fill out. If fewer questions are asked, there are fewer answers the seller will be tempted to lie about. But the more specifically referenced an item is in the questionnaire, the less likely is the forthright seller to overlook it. Remember, the seller's underlying common-law obligation, which survives these statutes, is to disclose all known material latent defects. Placing an item on the form creates a prima facie presumption of its materiality and, simultaneously, weakens any seller defense based on the patent-latent distinction. By filling out the form, the seller provides written evidence of representations, curtailing the "he said, she said" disputes that are typical in misrepresentation claims based on parol evidence. On the other hand, buyers cannot legitimately claim to have been surprised by defects clearly disclosed in a written form.

While the information can be useful to the buyer and the buyer's professional home inspector, information overload is an increasing concern.171 Each additional item or document required for sale competes with many others for the buyer's attention. For instance, in southern California, the seller disclosure form is just one of twenty-five separate disclosures the broker proffers,172 and this does not include the disclosures required of regulated lenders, the preliminary title report, and the pest control and home inspection reports.

E. Should Waivers and Disclaimers Be Permissible?