|
Underground Oil Storage Tanks
Buyers should be aware of potential problems associated with underground oil storage tanks. Although home heating oil tanks are not regulated, such tanks can cause serious problems if they have leaked oil. Advice on home heating oil tanks and the problems associated with them can be found at: http://www.deq.state.or.us/lq/tanks/index.htm
A buyer who knows or suspects that property has an underground storage tank should take appropriate steps to protect his own interests, including seeking information from the Department of Environmental Quality (DEQ) and, if necessary, consulting with an environmental hazards specialist or attorney. BUYERS ARE ADVISED TO HIRE APPROPRIATELY TRAINED ENVIRONMENTAL PROFESSIONALS TO INSPECT THE PROPERTY IF AN UNDERGROUD OIL STORAGE TANK IS FOUND OR SUSPECTED.
Oil storage tank inspection, decommissioning and cleanup requires a special license from DEQ. A list of licensed providers can be found at http://www.deq.state.or.us/lq/tanks/index.htm or ask your real estate licensee for assistance in finding the proper professional.
Environmental Hazards
Buyers should carefully review the Seller’s Property Disclosure Statement and any inspection reports available to determine if any of a number of potential environmental hazards may require further investigation. Environmental hazards include everything from expansive soils to landslides to forest fires, tsunamis, floods and earthquakes. Environmental hazards can also include indoor air quality (e.g., radon or carbon monoxide) and hazardous materials, like asbestos. Buyers concerned about external environmental hazards should check with the county in which the property is located. Oregon counties can be located at: http://www.aocweb.org/aoc/AboutOregonCounties/CountyLinks/tabid/72/Default.aspx. Flood plain maps and information are available from the Federal Emergency Management Agency (FEMA) at: http://www.fema.gov/business/nfip/sfhdform.shtm.
The Environmental Protection Agency (EPA) provides a great deal of information about indoor hazards on its website at: www.epa.gov/iaq/iaqinfo.html. Superfund sites are areas that have been listed by the federal government as contaminated.
A wealth of information on superfund sites, including their locations, is available by visiting the EPA’s website at: http://www.epa.gov/superfund/sites/. Information on Oregon superfund sites can be obtained from the Oregon Department
of Human Services at: http://www.dhs.state.or.us/publichealth/superfund/sites.cfm. Real estate licensees are not trained, and do not have the expertise, to discover and evaluate environmental hazards. Buyers, therefore, are advised to hire appropriately trained environmental professionals to inspect the property and its systems or fixtures for environmental hazards.
Wood stoves
DEQ has developed a statewide wood stove program to promote the use of cleaner-burning wood stoves and to help homeowners to burn wood more efficiently and with less pollution. Under Oregon law, no person may sell, offer to sell or advertise to sell a used, non-certified wood stove. Non-certified wood stoves (including fireplace inserts) are older models (mostly pre-1985) that have not been certified by the DEQ or the federal Environmental Protection Agency to meet
cleaner-burning smoke emission standards. Your community may have additional rules governing the sale of or use of wood stoves and fireplaces. Ask your agent for assistance or you can find the website for the county in which the property
is located by visiting: http://www.aocweb.org/aoc/AboutOregonCounties/CountyLinks/tabid/72/Default.aspx.
Websites for cities can be found at:http://www.orcities.org/CityResources/CityInformation/tabid/846/Default.aspx.
Buyers should contact their insurer early in the home buying process to determine what, if any, effect, a fireplace or wood stove may have on the availability or cost of fire insurance For more information on wood stoves, visit: http://www.deq.state. or.us/aq/burning/woodstoves/101.htm. Inspection of fireplaces and woodstoves requires special training and expertise. Although a real estate licensee may be able to help you find a local wood stove professional, they cannot themselves inspect or evaluate a wood stove.
Mold
Molds are one of a variety of biological contaminants which can be present in human structures, including in residential housing. Mildew is perhaps the most common and best known of the molds. Less well known, and far less common, are
certain molds identified as possible contributors to illness, particularly in people with allergies. Such cases usually involve property with defective siding, poor construction, water penetration problems, improper ventilation or leaking plumbing. In a few cases, these problems have led to the growth of molds which caused medical conditions in some people. Buyers, if concerned about potentially harmful molds, should arrange for inspection by a qualified professional. Information on moisture intrusion and mold problems associated with human structures can be found at: http://www.epa.gov/iaq/molds/moldresources.html. Inspection, discovery and evaluation of specific water intrusion or mold problems requires extremely
specialized training and is well beyond the scope of a real estate licensee’s expertise. Buyers are, therefore, advised to hire appropriately trained professionals to inspect the property if the buyer is concerned about the possibility of harmful molds.
Smoke Alarms
In Oregon, no person may sell a dwelling unless there is installed in the dwelling unit an approved smoke detector or smoke alarm installed in accordance with the rules of the State Fire Marshall. Because of this state law requirement, most residential real estate sale forms contain a representation by the seller that, at the earlier of possession or closing date, the dwelling will
have an operating smoke detector as required by law. In Oregon, ionization smoke alarms (the most common type) must have a 10-year battery and a “hush” mechanism which allows a person to temporarily disengage the alarm. All dwellings must
have the proper type, number and placement of alarms as required by the building codes at the time the dwelling was constructed but not less than one alarm adjacent to each sleeping area and at least one alarm on each level of the
dwelling. (Additional rules apply to rented property.) For information about smoke alarm and detector requirements in Oregon, you should visit the State Fire Marshall’s web site at: http://www.oregon.gov/OSP/SFM/Smoke_Alarms_Home.shtml.
Real estate licensees are not trained in building code compliance, therefore, if there is doubt about whether a smoke alarm or detector system complies with building and fire code requirements, a licensed home inspector, or the home alarm or detector company that installed the system, should be able assist you. Your real estate agent may be able to assist you in finding the right code compliance professional.
Deaths, Crimes and External Conditions
In Oregon, certain social conditions that may be of concern to buyers are considered not to be “material” by state law. Oregon Revised Statutes 93.275. Ordinarily, “material facts” must be disclosed by the seller or the seller’s agent. Because state law declares certain facts that may be important to a buyer to be not material, buyers cannot rely on the seller disclosing this kind of information. Buyers should undertake their own investigation if concerned that the property or a neighboring property has been the site of a death, crime, political activity, religious activity, or any other act or occurrence that does
not adversely affect the physical condition of, or title to, real property, including that a convicted sex offender resides in the area. Concerned buyers can contact their local police for more information.
Websites for Oregon counties can be found at:
http://www.aocweb.org/aoc/AboutOregonCounties/CountyLinks/tabid/72/Default.aspx.
Websites for cities can be found at:
http://www.orcities.org/CityResources/CityInformation/tabid/846/Default.aspx
.Some large cities (e.g., Portland) publish crime maps (e.g., www.portlandmaps.com) on their website. Information about registered sex offenders can be found by visiting http://egov.oregon.gov/DOC/faqs.shtml.
Buyers concerned that neighborhood properties may have been used for illegal drug manufacture can visit: http://www.oregonbcd.org/druglabs/druglabs.html, the website of the Building Codes Division, for more information.
Information on Oregon’s Drug Lab Clean Up Program and meth labs can be found at:http://www.dhs.state.or.us/publichealth/druglab/methlab.cfm. Under Oregon law, neither the seller nor their agent is allowed to disclose that an owner or occupant of the real property has or had human immunodeficiency virus or acquired immune deficiency syndrome.
Neighborhoods
Neighborhoods change over time so a buyer cannot expect the area surrounding their home to stay as it is. Buyers concerned about potential development in the surrounding area should check with governmental authorities to determine if any large scale building projects are scheduled for the area. Building permits, zoning applications and other planning actions are a matter of public record. In Oregon, local governments must develop comprehensive plans that guide development over long periods of time. These plans may include “overlay zones” that can have a significant effect upon development. If concerned about development, buyers should check with local government planning departments.
Information about planning departments can be found on the county or city website: http://www.aocweb.org/Cnty-links-frm.htm, or http://www.orcities.org/CityResources/CityInformation/tabid/846/Default.aspx..
For information on state road building projects, check with the Oregon Department of Transportation at: http://www.oregon.gov/ODOT/HighwayRegions.shtml. Location within a school district can be an important attribute of a neighborhood. School boundaries, however, are subject to change. If location within a particular school district is material to the purchase of real property, the buyer should investigate the boundaries and the likelihood of change by contacting the school district directly.
Oregon law provides a “just compensation” right for some Oregon property owners if a public entity enacts or enforces a land use regulation that restricts the use of property and has the effect of reducing the value of the property. The law allows, but does not require, governing bodies to modify, remove, or not apply land use regulations in lieu of paying compensation.
Property that has been in single ownership or held in a family over a long period of time may have more development potential and, therefore, value than has a neighboring property purchased more recently. At the same time, some property may be less valuable because of the potential for un-zoned, property specific uses on neighboring property. Real estate licensees are not trained to predict the contingent and uncertain potential effects of complex laws like Oregon compensation laws. Clients who believe their decision to sell or purchase Oregon real estate may be affected by Oregon’s property compensation laws are advised to seek the counsel of appraisers, attorneys or other land use professionals.
DOCUMENT INSPECTION AND INVESTIGATION
Information Generally
Information from third parties contained in the many documents associated with a real property transaction is not independently verified by real estate licensees. It is the responsibility of the buyer to read the documents provided and ask questions if uncertain or concerned. Interpretation of many real property transaction documents involves the practice of law and is, therefore, beyond the scope of a real estate licensee’s expertise. BUYERS UNCERTAIN ABOUT THE LEGAL EFFECT OF DOCUMENTS SHOULD CONSULT AN ATTORNEY.
MLS Information
Most properties marketed for sale by real estate licensees are listed in a Multiple Listing Service (MLS). Information about the listing, provided to the MLS by the listing broker, is made available to all subscribing members of the MLS. This information is typically contained in what is called an MLS “printout” or “data sheet.” Most of the information contained in an MLS data sheet or printout is obtained from the seller or third-parties like the county assessor’s office or other governmental entity. MLS data may be incomplete, an approximation or otherwise inaccurate. Personal property cited on the MLS data sheet should be included in the purchase agreement if the buyer wishes to have the personal property included in the sale. BUYERS SHOULD NOT RELY ON MLS- PROVIDED INFORMATION IF THAT INFORMATION IS CONSIDERED IMPORTANT UNLESS THE BUYER VERIFIES THE INFORMATION.
Seller’s Property Disclosure Statement
In most cases, residential property sellers in Oregon must provide a Seller’s Property Disclosure Statement to each residential buyer who makes a written offer. The form used by the seller is mandated by state law. The seller’s representations regarding the property are based upon the seller’s actual knowledge at the time the disclosure statement is made and are not the
representations of any financial institution that may have made or may make a loan pertaining to the property, or that may have a security interest in the property, or any real estate licensee engaged by the seller or buyer. Licensees are not responsible for misrepresentations by the seller unless they know of the misrepresentation and fail to disclose it. A buyer should carefully review the seller disclosures and verify, or ask their licensee to verify, any statements of concern. REVIEW OF THE SELLER’S PROPERTY DISCLOSURE STATEMENT IS NO SUBSTITUTE FOR PROFESSIONAL INSPECTIONS.
Real Estate Sale Form (Sale Agreement)
A contract for the sale of real property must be in writing to be enforceable in an Oregon court. A VERBAL OFFER OR ACCEPTANCE SHOULD NOT BE MADE OR RELIED UPON. Contracts for the sale of property are often called “earnest money”
or “sale” agreements. They are legally binding contracts. Buyers and sellers should seek competent legal advice before signing any contract they do not fully understand. Sale agreements usually include provisions concerning who will hold the earnest money and under what conditions it may be refunded to the buyer or forfeited to the seller. Both buyers and sellers should carefully review these provisions. The amount of earnest money pledged and the conditions under which it may be refunded or forfeited are important matters that should be carefully negotiated between the buyer and the seller.
Most sale agreements are written using a standard form. In Oregon, most licensees use a form developed specifically for Oregon real property transactions. Many of these forms contain dispute resolution provisions that require mediation or arbitration of disputes. Arbitration and mediation clauses can affect legal rights, including the right to a judicial determination of a claim and the right to appeal.
BUYERS AND SELLERS ARE RESPONSIBLE FOR SELECTING THE TERMS AND CONDITIONS OF THEIR AGREEMENT. REAL ESTATE LICENSEES CAN GIVE BUYERS IMPORTANT MARKETING, BUSINESS AND NEGOTIATING ADVICE AND INFORMATION AND CAN ASSIST INPREPARATION OF THE SALE AGREEMENT BUT ONLY PURSUANT TO THE CLIENT’S INSTRUCTIONS.
REAL ESTATE LICENSEES ARE NOT ATTORNEYS AND ARE PROHIBITED BY LAW FROM GIVING LEGAL ADVICE. To obtain a referral for a real estate attorney, visit the Oregon State Bar at http://www.osbar.org/public/legalhelp.html or contact
by phone at 503-684-3763 (Portland metro) or 800-452-7636 (greater Oregon).
Financing
The buyer’s ability to finance the property is an important contingency in most residential transactions. Buyers must act in good faith and use best efforts to obtain a loan if the sale is contingent upon obtaining a loan. Buyers often seek pre-approval from a lender prior to writing an offer. A pre-approval letter should state that the lender has reviewed the buyer’s credit report, income requirement and cash to close and pre-approves the buyer for the loan, subject to an acceptable appraisal of the property. The appraiser will normally work for the lender, not the buyer. To check the status of an appraiser, visit the
Appraiser Certification and Licensure Board at:
http://www.oregonaclb.org/index.php?option=com_content&task=view&id=20&Itemid=112. Once the appraisal has been received, the underwriter authorizes final loan approval. Only when the underwriting process is completed will an actual loan be secured. The entire financing process normally takes approximately 30-45 days. If the seller is asked to finance any part of the transaction, the buyer’s financial status will become material to the transaction. Any material defect in the buyer’s financial status must be fully disclosed to the seller. Because of the risks involved for the seller, the buyer should anticipate that the
seller will fully investigate the buyer’s credit worthiness prior to agreeing to carry financing for the buyer. A real estate licensee cannot hide material information from any party to a real estate transaction and should not be asked to do so by the buyer or seller.
Title Report and Commitment
The title report, or commitment to insure, produced by a title insurance company contains important information that must be reviewed by the buyer. In particular, the report will list certain “exceptions” to the policy the company will issue. Buyers should request copies of any documents mentioned in the report that are not understood or raise concerns about the state of the title. General information about title issues can be found at: http://www.titlelawannotated.com. Questions about the title report and associated documents can be directed to the title or escrow officer issuing the report or to the buyer’s attorney or surveyor. Review of title reports for legal deficiencies involves the practice of law.
Homeowners Insurance
The insurance claims history for a home may affect the cost of homeowners’ insurance, or even its insurability. Most insurance companies use a database service called the Comprehensive Loss Underwriting Exchange (CLUE) to track claims made. Depending on the content of the CLUE report, and the insurance company’s policy, home insurance may prove more difficult to get than expected. The buyer’s claims history and credit report may also be used to determine insurability. Insurers have used CLUE reports and other information, coupled with termination provisions in the policy, to cancel coverage after closing.
IT IS CRITICAL THAT BUYERS ARRANGE FOR HOMEOWNERS’ INSURANCE EARLY IN THE PROCESS OF PURCHASING PROPERTY RATHER THAN WAITING UNTIL CLOSING TO GET INSURANCE. If difficulty is experienced in obtaining the insurance, the buyer can ask the seller to furnish them with a copy of the CLUE report on the property.
Homeowners can obtain a copy of the report for their property online at: http://www.choicetrust.com. Buyers may want to talk to the licensee they are working with about whether obtaining suitable homeowners’ insurance should be
made a contingency of the sale. More information on homeowners insurance in Oregon can be found at: http://www.insuranceoregon.org/.
Home Warranties
A home warranty is an insurance contract. Home warranties for existing homes are common in today’s real estate market. The warranty generally covers the repair and replacement of equipment and appliances such as dishwashers, plumbing systems, electrical systems, and so on. Optional coverage may be available at additional costs for pools, built-in spa equipment, well pumps and other systems. Coverage and price vary considerably among warranty companies. A home warranty can be included as a term of a purchase agreement. Some real estate licensees provide home warranties to their clients. Buyers should discuss home warranties with their agent prior to purchasing a home. Your agent can provide you with information on companies offering home warranties for purchase.
Square Footage and Acreage
The square footage of structures and acreage data found in MLS printouts, assessor records and the like are usually just estimates and should not be relied upon. Many Oregon properties have not been surveyed and their exact boundaries are not known. If square footage or land size is a material consideration in a purchase, all structures and land should be measured by the buyer or a licensed surveyor prior to entering into a sale agreement, or should be made an express contingency of the agreement. You can find a licensed surveyor in your area by visiting their website at: http://www.osbeels.org/.
Homeowners Association Documents, Covenants, Conditions and Restrictions
Covenants, conditions and restrictions, called “CC&Rs,” are formally recorded private limitations on the right to use real property. Often, but not always, CC&Rs are enforced by a homeowners’ association. Review of the CC&Rs is
typically part of a real estate sale. Although real estate licensees are familiar with common CC&R provisions, determining the legal effect of specific provisions is considered the practice of law in Oregon and, therefore, beyond the expertise of a real estate licensee. If the subdivision in which the property is located is governed by a homeowners’ association, the CC&Rs may be very restrictive. Homeowners’ associations are often governed by their own articles of incorporation, bylaws, rules and regulations. Homeowners’ association rules and regulations can significantly impact a buyer’s plans for the property the buyer wants to purchase. Planned communities and condominiums are very likely to have detailed homeowners’ association governing documents, mandatory fees and ongoing homeowner obligations. Governing documents, fees and homeowner obligations should be reviewed by the buyer during the transaction.
If you have questions about CC&Rs or your legal rights and remedies under homeowners’ association governing documents, you should have your attorney review the documents for you. A real estate licensee is prohibited by law from giving legal advice. For more information on homeowners’ associations and CC&Rs, visit http://www.realtor.com/BASICS/condos/ccr.asp.
Lead-Based Paint Disclosure Form
Residential property built before 1978 (called “target” housing) is subject to the Residential Lead-Based Paint Disclosure Program administered by the Environmental Protection Agency (EPA) and the Department of Housing and Urban
Development (HUD). The Act requires sellers of target housing to provide the buyer with a lead-based paint disclosure and the pamphlet entitled Protect Your Family From Lead in Your Home. Information about the requirements and samples
of the forms can be found at: http://www.hud.gov/offices/lead/disclosurerule/index.cfm. If you make an offer on a home built before 1978 and do not receive the disclosure and pamphlet, you should ask your real estate licensee about lead-based paint disclosures. For more information and to locate companies certified and licensed to conduct lead-based paint testing or perform abatement, visit http://www.dhs.state.or.us/publichealth/leadpaint/index.cfm for the Department of Human Resources.
Property Taxes
“Real property in Oregon is taxed under a complicated formula that involves more than just valuation of the property. Some properties (typically, but not exclusively, farm or forest) are specially assessed and taxes deferred. The sale of such property can result in changes in the tax status and result in the levy of additional taxes. If a new home is being constructed and the closing precedes completion of the home, the full taxes that will be due upon completion may not be reflected in the closing statement. Buyer’s should carefully review closing documents and property taxes and seek the advice of a tax professional
if concerned about the valuation, the taxes assessed or potential changes in the tax status. Real estate licensees are not trained or licensed to provide tax advice. “
Additional Information:
Oregon Real Estate Agency: http://www.rea.state.or.us/
Oregon State Government: http://www.oregon.gov/
Association of Oregon Counties: http://www.aocweb.org
League of Oregon Cities: http://www.orcities.org
Oregon Association of REALTORS®: http://www.OregonRealtors.org
|
