Summer is one of the busiest seasons for real estate sales. Real estate transactions are often one of the largest capital expenditures a person makes in their lifetime. Equal in magnitude are the legal implications involved. To avoid legal issues and to ensure the validity of the contract to buy or sell real estate, it is important to comply with Ohio legal requirements.
Property Disclosure Forms are required for transfers of residential real estate. The purpose of this form is to notify a potential buyer of known material defect such as water damage, roof leaks, insect/termite infestations, electrical issues, or other structural defects. A defect is considered material, and therefore required to be disclosed, if the defect substantially affects the value of the residence.
To avoid legal issues, it is important for a seller to make the necessary disclosures. Failure to do so allows a buyer to rescind the sale or seek damages. Other potential remedies a buyer may seek include misrepresentation or fraudulent concealment. Disclosure is not required if the property is sold “as is.” However, this does not bar a claim for misrepresentation or fraudulent concealment. The Property Disclosure form is not a warranty and a potential buyer is strongly encouraged to obtain a professional inspection of the property.
Ohio law requires that all contracts involving the sale of real property be in writing, signed, and contain all essential terms (parties, property description, terms of price and payment). Many jurisdictions have a standard purchase agreement, often established by the board of realtors and the local bar association. The standard purchase agreement contains the essential terms such as description of property, purchase price, attorney approval clause, warranties (if any), and duration of offer.
It is crucial to carefully scrutinize all of the terms of the agreement to ensure both parties are in compliance with the contract and that all contingencies are met. For example, if the buyer does not receive a written loan commitment within the agreed upon timeframe, the contract automatically terminates. Additionally, if a buyer discovers defects during an inspection, they must deliver notice to the seller pursuant to the purchase agreement or else their rights to terminate the agreement are waived.
A non-lawyer such as a real estate agent may be able to assist with filling in the blanks of a standard form agreement, but they are not legally permitted to draft contract provisions or render legal advice. Working with an experienced real estate attorney will ensure that you understand the terms and legal implications of the contract, that all conditions are timely satisfied, and that there are no hidden terms or costs allocated to you.