Senate Bill No. 433
(By Senators Kessler, McCabe, Ross, Mitchell, Hunter, Sharpe
and Ball)
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[Introduced February 4, 1999;
referred to the Committee on the Judiciary.]
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A BILL to amend chapter thirty-six of the code of West Virginia,
one thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article twelve, relating
to a residential property condition disclosure act;
requiring that certain disclosures be made by sellers and
lessors; requiring acknowledgment of receipt; providing
exemptions; specifying time for disclosure; specifying
liability of seller or seller's agent; providing remedies;
and requiring development of standard forms.
Be it enacted by the Legislature of West Virginia:
That chapter thirty-six of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by
adding thereto a new article, designated article twelve, to read
as follows:
ARTICLE 12. RESIDENTIAL PROPERTY CONDITION DISCLOSURE ACT.
§36-12-1. Short title.
This article may be cited as the "West Virginia Residential
Property Condition Disclosure Act."
§36-12-2. Application of article.
The provisions of this article apply to transfers by sale,
exchange, installment land contract, lease with an option to
purchase or auction of a manufactured housing lot or residential
real property, improved with dwelling units for one to four
families.
§36-12-3. Definitions.
As used in this article, unless the context clearly requires
otherwise:
(1) "Agent" means any individual, partnership, corporation
or trustee defined as a "real estate broker," "associate broker"
or "real estate salesperson" in section two, article twelve,
chapter forty-seven of this code, who acts on behalf of a seller
or buyer of residential real property;
(2) "Buyer" means any individual, partnership, corporation or trustee purchasing any estate or interest in real property;
(3) "Final settlement" means the time at which the parties
have signed and delivered the papers, including the deed,
necessary to convey title to the estate or interest in the
residential real property being conveyed;
(4) "Material defect" means any defect or condition that
would tend to substantially and adversely affect either the
usefulness or the value of residential real property;
(5) "Residential real property" means any estate or interest
in a manufactured housing lot or real property, improved for
dwelling units for one to four families;
(6) "Seller" means any individual, partnership, corporation
or trustee leasing, selling or otherwise transferring any estate
or interest in residential real property; and
(7) "Subagent" means any individual, partnership,
corporation or trustee who acts on behalf of an agent.
§36-12-4. Required disclosures; acknowledgment of receipt.
(a) Except for transfers specifically excluded from the
provisions of this article, a seller transferring residential
real property shall disclose, in writing on a form as prescribed
under the provisions of section ten of this article, to the buyer, agent or subagent, all material defects of that property
that are known to him or her at the time the property is offered
for sale and that become known prior to the time of final
settlement. Disclosures shall include all material defects known
to exist in regard to the physical condition and location of the
property, including, but not limited to:
(1) Water, sewer and septic systems, including the source of
household water, water treatment system and sprinkler system;
(2) Access to the property;
(3) Structural systems, including room, walls, floors,
foundation and basement, if any;
(4) Plumbing, electrical, heating and air conditioning
systems, wood burning systems, fireplaces;
(5) Wood destroying insect or other infestations;
(6) Hazardous or regulated materials, including asbestos,
lead-based paint, radon and underground storage tanks; and
(7) Flooding or water seepage.
(b) The seller is not required to undertake or provide any
independent investigation or inspection of the property in order
to make the disclosure required by this article.
(c) A buyer shall acknowledge receipt of the disclosure statement required by this article, in writing upon receipt, on
a form as may be prescribed pursuant to section ten of this
article.
§36-12-5. Exemptions.
This article does not apply to the following transfers of
residential real property:
(1) Transfers pursuant to a court order including, but not
limited to, transfers ordered by a court in administration of an
estate, transfers ordered pursuant to a writ of execution,
transfers by foreclosure sale, transfers by a trustee in
bankruptcy, transfers by eminent domain, transfers pursuant to
condemnation proceedings and transfers resulting from a decree of
specific performance or partition;
(2) Transfers to a trustee or other creditor pursuant to a
deed of trust or a credit line deed of trust as provided for in
sections one-a and fourteen, article one, chapter thirty-eight of
this code;
(3) Transfers to a beneficiary of a deed of trust by a
trustor or successor in interest who is in default;
(4) Transfers by quitclaim or corrective deed without
consideration;
(5) Transfers by a fiduciary in the course of the
administration of a decedent's estate, guardianship,
conservatorship or trust, when a residential property condition
disclosure form is provided by a beneficiary with knowledge of
the property;
(6) Transfers from one or more co-owners solely to one or
more other co-owners;
(7) Transfers without consideration between family members;
(8) Transfers by will or intestacy;
(9) Transfers by testamentary or inter vivos trust;
(10) Transfers without consideration to voluntary charitable
or educational associations or trustees thereof and like
nonprofit corporations;
(11) Transfers between spouses or former spouses resulting
from a decree of divorce, separate maintenance or a property
settlement stipulation pursuant to the provisions of article two,
chapter forty-eight of this code;
(12) Transfers made by virtue of the record owner's failure
to pay any federal, state or local taxes;
(13) Transfers made pursuant to mergers of corporations or
transfers made by a subsidiary corporation to its parent corporation for no consideration other than the cancellation or
surrender of the subsidiary's stock;
(14) Transfer of new, not previously occupied dwelling units
when:
(A) The seller warrants that the unit was constructed in
accordance with state, county or municipal building codes in
effect in the jurisdiction in which the dwelling unit was
constructed; or
(B) If there is no building code in effect in the
jurisdiction in which the dwelling unit was constructed, the
state building code; and
(15) Transfers without consideration between a principal and
straw party for any purpose.
§36-12-6. Time for disclosure.
The disclosures required to be made by this article shall be
made in writing and presented to a buyer before any offer to
purchase is signed by a buyer and shall be updated or amended as
necessary to reflect knowledge subsequently acquired by the
seller or agent of any material changes occurring in the property
before the time of final settlement.
§36-12-7. Liability of the seller or seller's agent.
(a) The provisions of this article do not give rise to a
cause of action against a seller or seller's agent or subagent
for:
(1) Material defects in the condition of the residential
property which are disclosed to the buyer prior to the buyer's
making an offer to purchase;
(2) Material defects which may develop after the offer to
purchase is made but which are disclosed before the time of final
settlement if the seller has complied with the agreement of sale;
(3) Material defects which occur or develop after the final
settlement; or
(4) Material defects known to the buyer before final
settlement.
(b) Notwithstanding any other provision of this code to the
contrary, neither a seller nor a seller's agent is liable under
this article for any error, inaccuracy or omission of any
information required by this article to be disclosed if:
(1) The error, inaccuracy or omission was based on
information provided by public agencies and the seller and any
agent of the seller reasonably believed the information to be
correct and had no actual knowledge to the contrary; or
(2) The error, inaccuracy or omission was based upon
information provided in a report or opinion of a licensed
engineer, land surveyor, geologist, pest control expert,
contractor or other home inspection expert, dealing with matters
within the scope of his or her license or expertise, and the
seller and any agent of the seller reasonably believed the
information to be correct, had no actual knowledge to the
contrary and used due care in obtaining the information from the
third party and in transmitting it to the buyer.
§36-12-8. No invalidation of transfer.
No transfer of residential real property may be invalided
solely because of the failure of any person to comply with the
provisions of this article.
§36-12-9. Remedies.
The failure to comply with the provisions of this article is
an unfair or deceptive act or practice in the conduct of trade or
commerce within the meaning of section one hundred four, article
six, chapter forty-six-a of this code.
§36-12-10. Property condition and material defect report form,
acknowledgment of receipt; waiver
.
(a) The West Virginia real estate commission shall develop a standard form to be known as the "residential property
condition disclosure form" which shall contain a section for the
buyer to acknowledge receipt of the disclosure form and a section
for the buyer, if the buyer so elects, to waive the right to have
the disclosures made by the seller as required by this article.
Approval of the form shall be made by the commission at a meeting
held pursuant to section three, article nine-a, chapter six of
this code. The form shall also be approved by the head of the
division of consumer protection of the office of the attorney
general. Standard forms shall be provided to the clerk of each
county commission by the real estate commission no later than the
first day of July, two thousand. The disclosure form shall
provide for the disclosure of all information required by the
provisions of section four of this article, and shall enumerate
each system or item as set forth in section four, and shall
include a space for disclosing any defects to each system or
item.
The disclosure form shall contain a notice to the
prospective buyer that he or she may wish to obtain professional
advice or inspection of the property. The notice shall state
that the information contained in the disclosure is the representation of the seller and is not the representation of an
agent or salesperson, if any. The notice shall further state
that the seller's representations are for disclosure purposes
only and do not constitute a warranty of any kind by the seller
nor do they substitute for any inspection or warranties, which
the parties, or either of them, may wish to obtain or provide for
in any agreement between them.
(b) The buyer may waive in writing his or her right to
receive a residential property condition disclosure form. The
waiver may not be a term or condition of any agreement between an
agent and any other person. The waiver shall be signed by the
buyer and shall state as follows: "I have been informed of my
right to require the seller to make residential property
condition disclosures pursuant to article twelve, chapter
thirty-six of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, and I hereby waive my right to
those disclosures." If a buyer waives his or her right to
receive residential property condition disclosures, the seller is
not obligated under this article to provide the disclosures to
that buyer.
NOTE: The purpose of this bill is to impose a duty on
sellers and lessors of certain residential real estate to
disclose material defects and conditions to prospective buyers or
lessees.
This article is new; therefore, strike-throughs and
underscoring have been omitted.
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