In previous posts, we’ve been looking at the topic of disclosure in real estate purchases. As we noted last time, sellers of residential property in North Carolina have a duty to make disclosures by filling out the proper disclosure paperwork as part of the sale.
Timing is an important issue in disclosures. Under state law, these disclosures are supposed to be made before the buyer makes an offer to purchase, exchange or option the property, or exercises the option to purchase the property under a lease with the option to purchase.
The disclosure statement can be included in the real estate contract, as an addendum to the contract, or in a separate document. If the seller fails to make the required disclosures before the required time–if the seller makes disclosures after an offer is made, for instance–the buyer has the right to cancel. That being said, the buyer has to exercise this right in a timely manner, and must do so in the proper manner.
As to timing, the buyer must exercise the right to cancel the agreement for failure to disclose by the earliest of the following dates: the end of the third day following receipt of the disclosure statement; the end of the third day following the date the contract was made; settlement or occupancy of the purchaser in cases of sale or exchange; or settlement under a lease agreement giving the buyer the option to purchase. The buyer is required to provide written notice to the owner or the owner’s agent in order to cancel the agreement.
We’ll continue this discussion in our next post, looking particularly at a couple important points regarding liability for failure to disclose.