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.”

Fair Housing Video Series

In recognition of April being National Fair Housing Month, Illinois REALTORS® recently conducted a series of interviews on the different ways housing law affects landlords and tenants.

In the first video of our Fair Housing series, REALTORS® Mike Rickert and Annette Akey Panzek talk about the types of modifications property owners can make to better accommodate seniors and disabled tenants. Additionally, Garland and Heather Armstrong, a married couple living in Chicago, tell of their experiences in what considerations property owners and REALTORS® should keep in mind.

Further installments in the video series will include a closer look on how landlords can meet obligations under the Fair Housing Act, as well as a look at what are known as “hidden disabilities” and the types of accommodations necessary for people with such conditions.

Click here to view the first video, and be sure to check back for future installments.

DR Legal News features insights on 7 legal case studies

Illinois REALTORS® can learn from 7 different legal case studies in the March edition of DR Legal News.

Benefit from the research and analysis provided by Lisa Harms Hartzler of Sorling Northrup Attorneys regarding seven real estate situations, including:

  • Real estate agent owed purchaser no duty to disclose of convict living next door;
  • Plaintiff injured while viewing property was trespasser; and
  • Neither buyer nor seller entitled to attorney fees under contract or RESPA.

Want to know more? See the entire March issue of DR Legal News.

CFPB’s future questioned in midst of recent RESPA enforcements

Even as the Consumer Financial Protection Bureau (CFPB) continues to fine and penalize companies that violate the Real Estate Settlement Procedures Act (RESPA), Illinois REALTORS® is monitoring the actions of the CFPB’s critics, which include some congressional leaders and the Trump administration.

In the March edition of DR Legal News, Jeffrey T. Baker, of Sorling Northrup Attorneys, reviews some of the latest developments concerning Prospect Mortgage, the PHH Corporation case, CFPB Director Richard Cordray and the Dodd-Frank Act. Prospect Mortgage was recently fined $3.5 million by CFPB for RESPA violations.

In addition to Baker’s article, the DR Legal News includes information about:

  • 7 legal case studies;
  • real estate disciplines;
  • managing broker renewals;
  • independent expenditure support;
  • customizable RVOICE brochures; and
  • Illinois REALTORS® Conference & Expo.

Redesigned ‘The Consumer’s Guide to Real Estate Agency in Illinois’ now available to order

Place your orders now for the popular “The Consumer’s Guide to Real Estate Agency in Illinois” through the Illinois REALTORS® Store.

It’s been changed from a tri-fold brochure to an 8 1/2 by 11-inch, two-sided flyer with perforated cards at the bottom. Look for item #334. They are available in pads of 50 ($11 each), plus taxes, shipping and handling. The flyers discuss agency relationships in real estate transactions in accordance with the Illinois Real Estate License Act of 2000. They supply consumers with explanations of various forms of agency when consumers are using real estate professionals to help them sell, buy and lease real estate.

If you are a broker and plan to distribute the flyers to sales associates, you can download them for free and print them at your convenience.