New Form 142: When is the vacant land disclosure statement required?

QUESTION: As real estate professionals selling vacant land, we’ve been informing our clients about a new disclosure form for these transactions. Is this new vacant land disclosure form a requirement, or is it optional for sellers to provide it to buyers before they make an offer?

ANSWER: Unlike the residential property disclosure, which is statutorily mandated in Chapter 47E of the North Carolina General Statutes, the Vacant Land Disclosure Statement (Form 142) is not required by law. However, when you use the Offer to Purchase and Contract – Vacant Lot/Land (Form 12-T), there is now a new contractual provision that requires the seller to provide the form prior to receiving the offer.

Paragraph 3(d) of the Vacant Lot/Land contract gives the parties two choices. The first checkbox simply states, “Buyer has received a signed copy of the Vacant Land Disclosure Statement (Form 142) prior to making this offer.” By checking this box, the parties have created a contractual obligation to provide the new form as part of their negotiations and agreement.

The second option in 3(d) says, “Buyer has NOT received a signed copy of the Vacant Land Disclosure Statement (Form 142) prior to making this offer and shall have the right to terminate or withdraw this Contract without penalty (including a refund of any Due Diligence Fee) prior to the end of the third calendar day following the Effective Date.” A seller who chooses not to provide the new disclosures is giving the buyer the right to cancel or terminate the contract within the next three days following the full execution of the purchase agreement. This creates a strong incentive for sellers to provide the disclosure statement. Additionally, this disclosure statement offers risk management benefits to agents who can use it to discuss material facts and other possible issues related to the subject property

The disclosures in Form 142 align with the current RPOADS and MOG forms produced by the North Carolina Real Estate Commission. Sellers of vacant land will have the same options to make a representation or check “no representation” for each disclosure question. If a seller provides these disclosures before the buyer makes an offer, the buyer will not have the right to terminate within three days following execution or receive a refund of all monies paid, including the due diligence fee.

Release Date: 7/11/2024