Can brokers check the “no representation” boxes on the Residential Property Disclosure Statement when selling their own property?
QUESTION: I am a licensed broker. I am about to list a residential property for sale that I have owned for several years. Am I allowed to check any of the “No Representation” boxes on the Residential Property Disclosure Statement?
ANSWER: Our view is that a property owner who has an active real estate license may lawfully choose to check the “No Representation” boxes on the Disclosure Statement. However, that broker retains an obligation to disclose all material facts about the property being sold, including facts that the broker knows about, and facts that the broker reasonably should know about.
Essentially, we see a technical distinction between a property owner’s obligations under the Residential Property Disclosure Act and a broker/owner’s obligations under the Real Estate License Law.
The Residential Property Disclosure Act (the “RPDA”) requires most owners of residential property to deliver a disclosure statement to a purchaser no later than the time the purchaser makes an offer for the property. However, the RPDA allows those owners to either make disclosures concerning specified “characteristics and conditions” of the property, or state that the owner makes no representations as to those “characteristics and conditions”. There is no exemption in the RPDA for real estate broker-sellers. Therefore, the RPDA gives brokers the same right to check the “No Representation” boxes as any other seller.
That fact does not excuse brokers from their obligations under the License Law (and Article 2 of the REALTOR® Code of Ethics). Section 93A-6(a)(1) of the License Law obligates brokers to disclose material facts about a transaction in which they are engaged. Section 93A-6(b)(3) makes it clear that this obligation extends to transactions in which the broker is a party (and not necessarily acting as a broker). It states that brokers may be disciplined when: “[t]he licensee has violated any of the provisions of G.S. 93A-6(a) when selling, leasing, or buying the licensee’s own property”.
Practically speaking, a broker-seller whose license is active has a duty to disclose material facts about his or her property, whether it is accomplished by completing the Disclosure Statement or otherwise.
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