Short answer
It is the state form where a seller of a one-to-four-unit home discloses known material defects. Under Pennsylvania's Real Estate Seller Disclosure Law, the seller completes it and delivers a signed, dated copy before the agreement of sale is signed. Estate fiduciaries and some other transfers are exempt.
Who has to complete it
The Real Estate Seller Disclosure Law, 68 Pa.C.S. 7301 and following, applies to residential real estate transfers of one to four dwelling units, including sales, exchanges and installment contracts. A seller who intends to transfer an interest in the property must disclose material defects known to the seller by completing all applicable items in the statement.
If you are selling with an agent, the agent must advise you of your duties and give you the form. If you sell without one, the duty is yours.
What it covers
The State Real Estate Commission's form must call for disclosures on sixteen subjects, including the seller's expertise in construction, when the property was last occupied, roof, basements and crawl spaces, pests, structural problems, additions and remodeling, water and sewage, plumbing, heating and cooling, electrical, appliances, soils and drainage, hazardous substances, condominium or association issues, and legal issues affecting title or use.
If something is unknown or unavailable, the seller may disclose based on the best information available.
When and how
A signed and dated copy must be delivered before the buyer and seller sign the agreement of transfer. Delivery can be by personal delivery, first class mail, certified mail or fax to the buyer or the buyer's agent. If something changes before final settlement and makes the disclosure inaccurate, the seller must notify the buyer. The seller can amend the disclosure in writing before the agreement is signed.
The seller is not obliged to investigate, but may not make false or misleading statements or fail to disclose a known material defect.
Who is exempt
The statute exempts, among others, transfers by a fiduciary in the administration of a decedent's estate, guardianship, conservatorship or trust; transfers by court order, including by a bankruptcy trustee; foreclosure sales; transfers between co-owners; transfers to a spouse or a person in the direct family line; and transfers between spouses under a divorce decree or settlement. Transfers of unimproved land and of property to be demolished or converted to another use are also exempt.
New construction not previously occupied can be exempt if warranty, inspection and occupancy conditions are met.
Consequences of getting it wrong
A sale is not invalidated just because someone failed to comply. But anyone who willfully or negligently violates the duties can be liable for the buyer's actual damages, and the action must start within two years after final settlement. A seller is not liable for errors they had no knowledge of, or that came from a reasonable belief a defect was fixed, or from reports by public agencies, inspectors or licensed contractors.
If you are selling to a cash buyer, you still complete the form where required. Kaizen Home Buyers can answer process questions at 267-329-0084, and your attorney can answer legal ones.