The Residential Seller’s Property Disclosure Statement (SPDS),used when buying and selling a home in Phoenix, AZ and other Arizona cities, is a very important document. The purpose of the form is to allow a property seller to disclose facts about the home and property to potential home buyers that could be of material importance in moving forward with the purchase of the home.
We encourage home sellers to be completely forthright in filling out the SPDS form. Not only is it the right thing to do, it helps protect a home seller from future liability. We, the Urban Team, are told by real estate attorneys that “failure to disclose” accounts for a high percentage of law suits filed by real estate buyers. Thus, we like to say to home sellers, “disclosure is your friend.”
WHAT IS A HOMEOWNER EXPECTED TO DISCLOSE TO A POTENTIAL HOME BUYER?
Attorneys say people selling residential real estate need to disclose anything they know about the home, property or area that could be of material importance to a buyer. Since that is a pretty broad statement, the Arizona Association of Realtors has created the SPDS form in an attempt to make the process as easy as possible. The disclosure form is divided into 6 general sections:
- Ownership and General Property Information
- Building and Safety Information
- Utility Company Info
- Environmental Information
- Sewer and Water Water
- Miscellaneous Conditions and Explanations
ARE THERE THINGS A HOMEOWNER DOES NOT HAVE TO DISCLOSE BY LAW?
According the the Residential Seller’s Advisory, a home seller does not have to disclose that the property is or has been:
- The site of a nature death, homicide, suicide or crime classified as a felony.
- Owner or occupied by a person exposed to HIV or diagnosed as having AIDS or other diseases transmittable through occupancy of a property.
- Located in the vicinity of a sex offender.
FYI: the law does not protect a home owner who is asked questions about one of the above statements who knowingly lies in his/her answer. A homeowner can respond by saying they are not required by law to answer such questions.
CAN I READ THE SELLER DISCLOSURE STATEMENT PRIOR TO SELLING MY HOME?
DO I HAVE TO FILL OUT A PROPERTY DISCLOSURE STATEMENT WHEN SELLING A HOME IN AZ?
A homeowner is not required by law to provide a completed SPDS form when selling real estate in Arizona. As we understand, you must disclose in the property listing that you will not be providing property disclosures. That said, Arizona law does require a property seller to disclose material facts about the property whether or not you are asked by the buyer or a real estate agent. Some legal opinions brought down through the courts suggest that nondisclosure may be given the same legal effect as fraud.
DO I HAVE TO DISCLOSE IF I NEVER OCCUPIED THE HOME?
If you’ve bought a home recently from a lender you probably did not get property disclosures as they never occupied the home. In our opinion, it is always good to fill out the SPDS form, even if you can not knowingly answer any of the questions. In the past there have been cases where an investor or heir to an estate did not fill out a disclosure form and were sued for non-disclosure. In one case, a neighbor knew about a problem and also knew the landlord was aware of it… opps.
FINAL THOUGHTS FROM THE URBAN TEAM ABOUT PROPERTY DISCLOSURE IN PHOENIX ARIZONA:
- We are big proponents of disclosure. Both the home buyer and home seller deserve quality information during a real estate transaction. Property disclosures are an important part of the information exchange.
- When filling out the disclosure form, you will often see questions worded, “Are You Aware Of…”. We are told by real estate attorneys that the intention of the wording is for a home seller to disclose items they actually know when filling out the form.; Just answer the questions as honestly and thoroughly as possible with the information you already know.
- Your real estate agent is prohibited from helping answer questions on the SPDS form. Your agent or your attorney can help explain confusing questions, yet the actual answer is up to you, the home seller.
- We encourage home sellers to have the SPDS form completed at the time the home is put on the market. Under the Arizona Residential Purchase Contract, a copy of the SPDS will be provided to the home buyer within 5 days of contract acceptance.
- If you have any questions about any forms used in the real estate process, please consult with your agent, your agent’s broker or your real estate attorney prior to signing.
Best to you and let us know if you have any questions about the home buyer or home selling process in downtown, north central or greater Phoenix AZ. We’ve been helping people for over 20 years and are happy to answer your questions.
The Urban Team at Realty Executives
7600 N. 16th Street, Suite 100
Phoenix, AZ 85020