Sellers and REALTORS® to benefit from format change to residential disclosure reports

Betsy Urbance

A format change to the Illinois REALTORS® version of the Residential Real Property Disclosure Report will help seller clients and their REALTORS® better document when disclosures are presented to buyers.

The change follows the regular forms review process by the Illinois REALTORS®’ Legal Team. Members can sign in and see the report here.

“We gave serious consideration to the format change that might change or add another step to the completion process,” says Betsy Urbance, Illinois REALTORS® Director of Legal Services. “Please note the Illinois Residential Real Property Act has not been amended and brokerages may opt to not use the REALTORS®’ version of the form. Only the format for our form, which is available for our members’ use, has changed.”

Urbance explains the change:

“We purposely changed page 4 to give sellers proof they met their obligation to give the disclosure report and show relevant portions of the statute to the buyers prior to the buyers becoming bound by the contract. We acknowledge this might change the process a bit. However, based on real life experience in seller disclosure litigation, the inability of sellers to prove disclosures were given is problematic. Although the statute does not require buyers to sign disclosures, sellers are required to give the disclosures and statute in a timely manner. So, the change gives sellers a better way to prove their duties were met.

“Sellers should sign and date the form on the date it is provided to the buyers (or the buyers’ agents),” she says. “Sellers are required to provide this form/portion of the statute before buyers become obligated on the purchase contract. In other words, sellers should sign and date reports some time before contracts are agreed to by the parties.

“As a result, if buyers initially download forms from the MLS some time prior to making offers, once buyers make offers, sellers should ‘circle back’ and sign and date the forms on or at the time contracts are entered. Also, this provides sellers a chance to review initial disclosure reports for any needed changes. This is always recommended when properties have been on the market for some time. After all, what if between the time the buyer’s agent downloaded the report and the time of contract, the seller’s basement flooded after the second ‘100-year-rain’ in the last year?

“This change is our model, and we believe it puts our members (and their seller-clients) in the best position to reduce their risk … and help sellers prove they met their statutory obligations. Whether or not associations and/or brokerages take up this model is a matter of their business discretion.”

2 thoughts on “Sellers and REALTORS® to benefit from format change to residential disclosure reports

  1. Is providing the residential real property disclosure report on the MLS system sufficient evidence that the buyer has the report since it is available to the selling agents via the MLS system?

  2. As stated above, depending on specific facts, this might not be enough. Page 4 includes a spot for seller to sign and date ON the date that the buyer or the buyer’s agent is given the form. If there is a way to know that the buyer’s agent downloaded the forms from MLS on a particular day, then the seller could sign and date on that day. If not, there might be one additional step involved where the seller will sign and date the form on the date the form is given (or confirmed to have been given) to a buyer agent or the buyer once there is an initiation of an actual transaction. Depending on the gap in time from the download of the initial disclosure documents to the institution of a particular transaction, this is a good opportunity for the listing agent to have the seller client review the form for accuracy, sign it and date it.

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