Ohio Residential Property Disclosure Form

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The Ohio Property Disclosure FormThe Ohio Residential Property Disclosure Form is a statement of the condition of the property and of information concerning the property actually known by the owner.

Click the image to see a larger version of a part of Page 1 of the Ohio Residential Property Disclosure Form (11/6/08).   Read the text underlined in red related to the water supply.  The form does not explain which standards will be used to interpret the term fully corrected or the rationale behind the 5 year stipulation.

According to Dennis Ginty of Ohio Department of Commerce, the Ohio Residential Property Disclosure Form was adopted in 1993.  As the statute does not specifically provide for the five-year period, the establishment of that five-year period was a policy decision.  At that time it was determined to be a reasonable period of time for the disclosure of those specific items.  The form also noted that the owner needs to disclose “material problems or defects that occurred over five years ago that have not been fully corrected.”  The statute does not define the term “fully corrected.” A challenge to that terminology and any issue arising between a seller and a buyer would be a civil issue for the courts.  The Ohio Division of Real Estate & Professional Licensing is not aware of case law that addresses or defines that term.

Ohio Residential Property Disclosure Form Disclosures

• Water Supply
• Sewer System
• Roof
• Water Intrusion
• Structural Components (Foundation, Basement/Crawl Space, Floors, Interior and Exterior Walls)
• Mechanical Systems
• Wood Boring Insects/Termites
• Presence of Hazardous Materials
• Flood Plain/Lake Erie Coastal Erosion Area
• Zoning/Code Violations/Assessments/Home Owners Association
• Boundary Lines/Encroachments/Shared Driveway/Party Walls
• Underground Storage Tanks/Wells
• Other Known Material Defects

Page 4 of the Ohio Residential Property Disclosure Form states that “the owner makes no representations with respect to any offsite conditions.”

Study related to Ohio’s Residential Property Disclosure Form

An Analysis of Ohio’s Residential Property Disclosure Form by Karen Eilers Lahey, University of Akron, Department of Finance, 1996

The purpose of this study is to examine the effectiveness of Ohio’s recent adoption of a mandated residential property disclosure law. Two different questionnaires are developed to solicit the viewpoints of buyers and of highly successful real estate agents. A random sample of 900 buyers of residential property during the period of July, 1994 to June, 1995, are selected for one questionnaire, and the other is sent to 200 very successful real estate agents.  Results indicate that 45.3 % of buyers report that after closing they found problems with the property that are not listed on the on the property disclosure form. There are statistically significant differences by type of mortgage used to finance the purchase of the home, age of the buyer, and first-time versus repeat buyers.  Suggestions for possible changes in the form are based on the findings for both the buyer and agent questionnaire.

Benefits of Mandatory Seller Disclosure Laws

According to authors Karen Eilers Lahey, (Charles Herberich Associate Professor of Real Estate, Department of Finance, University of Akron) and David A. Redle, (Professor of Business Law, University of Akron) of the study The Ohio Experience: The Effectiveness of Mandatory Real Estate Disclosure Forms, Real Estate Law Journal [Vol. 25:319 1997], theoretically, all parties benefit from mandatory seller disclosure laws.

• The buyer benefits by receiving a significant volume of information regarding the property, some of which might have only been reluctantly supplied or not supplied at all.
• The property disclosure balances the risks, thereby relieving the seller of the growing burden of disclosure liability.
• Finally, the brokers and agents benefit by avoiding the dangers of involvement in providing information about the property either specifically in legislation or as a consequential beneficiary of legislation.

The study concludes that the Ohio Residential Property Disclosure form is ineffective in drawing out the intended information (for any number of reasons including ignorance and intended deceit) and this suggests that the legislature might enhance the law by requiring professional inspections.

Ohio Revised Code 5302.30

(a) exempts a transfer pursuant to court order, including, but not limited to, a transfer ordered by a probate court during the administration of a decedent’s estate, a transfer pursuant to a writ of execution, a transfer by a trustee in bankruptcy, a transfer as a result of the exercise of the power of eminent domain, and a transfer that results from a decree for specific performance of a contract or other agreement between persons;

(b) A transfer to a mortgagee by a mortgagor by deed in lieu of foreclosure or in satisfaction of the mortgage debt;

(c) A transfer to a beneficiary of a deed of trust by a trustor in default;

(d) A transfer by a foreclosure sale that follows a default in the satisfaction of an obligation secured by a mortgage;

(e) A transfer by a sale under a power of sale following a default in the satisfaction of an obligation that is secured by a deed of trust or another instrument containing a power of sale;

(f) A transfer by a mortgagee, or a beneficiary under a deed of trust, who has acquired the residential real property at a sale conducted pursuant to a power of sale under a mortgage or a deed of trust or who has acquired the residential real property by a deed in lieu of foreclosure;

(g) A transfer by a fiduciary in the course of the administration of a decedent’s estate, a guardianship, a conservatorship, or a trust;

(h) A transfer from one co-owner to one or more other co-owners;

(i) A transfer made to the transferor’s spouse or to one or more persons in the lineal line of consanguinity of one or more of the transferors;

(j) A transfer between spouses or former spouses as a result of a decree of divorce, dissolution of marriage, annulment, or legal separation or as a result of a property settlement agreement incidental to a decree of divorce, dissolution of marriage, annulment, or legal separation;

(k) A transfer to or from the state, a political subdivision of the state, or another governmental entity;

(l) A transfer that involves newly constructed residential real property that previously has not been inhabited;

(m) A transfer to a transferee who has occupied the property as a personal residence for one or more years immediately prior to the transfer;

(n) A transfer from a transferor who both has not occupied the property as a personal residence within one year immediately prior to the transfer and has acquired the property through inheritance or devise.

A broken clock is right twice a day.