Capital AreaRealtor®
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2011 May- June
Legal Hotline Call Summary By Chris Darby, Tom Muldoon and John Nalls of Counselors Title, LLC, and Pardo & Drazin, LLC, General Counsel Below are some questions answered on the GCAAR and WDCAR Legal Hotlines. The answers provided here are the opinions of the authors, are for informational purposes, and are only for GCAAR members. Neither Counselors Title, LLC, nor Pardo & Drazin, LLC is providing legal advice, but rather providing a general statement of law. No lawyer/client relationship is - or will be - established as a result of the material which follows. Readers are encouraged to retain their own counsel for their specific questions. Answers may have been edited for formatting purposes.
Question: We have a client who is bidding on a house in which we are aware a murder was committed. Is the seller required to disclose this information? Are we allowed to advise the buyer?
Answer: No. In all 3 jurisdictions within the purview of GCAAR, the legislatures have determined that a murder occurring in a property is a nonmaterial fact which is not required to be disclosed: Section 47-2853.198 of the District of Columbia Code provides: Acts not required to be disclosed. Notwithstanding the possibility that a fact may have a psychological impact on a purchaser, lessee, or sublessee, it shall not be a material fact that must be disclosed in a real estate transaction, nor shall it be the basis for a cause of action against an owner of real property, a real estate broker, a real estate salesperson, a property manager, a lessee, or sublessee, that the following information was not disclosed to the purchaser, lessee, or sublessee: (1) An occupant of real property, at any time, was infected or was or is suspected to have been infected with a human immune deficiency virus; (2) An occupant of real property, at any time, has been diagnosed, was infected, or was suspected to have been diagnosed as having acquired immune deficiency syndrome or any other disease that has been determined by medical evidence to be highly unlikely to be transmitted through occupancy of property alone; or (3) The property, at any time, has been or was suspected to have been the site of a suicide, homicide, or other felony. In Maryland, Section 2-120 of the Real Property Article also specifically provides that it is NOT a material fact or a latent defect relating to a property that : “(1) An owner or occupant of the property is, was, or is suspected to be: (i) Infected with Human immunodeficiency virus; or (ii) Diagnosed with acquired immunodeficiency syndrome; or
(2) A homicide, suicide, accidental death, natural death, or felony occurred on the property” Section 17-322.1 of the Business and Occupations Article (Regarding real estate agents and broker) reiterates this and provides that it is not grounds for a disciplinary action if a licensee did not disclose such information and that a licensee may not be held personally liable for not doing so. The Code of Virginia in Section 55-524A goes even further and indicates that not only need an owner not disclose AIDS/HIV and “a homicide, felony or suicide, but also any “act or occurrence which had no effect on the physical structure of the real property, its physical environment, or the improvements located thereon”. Furthermore, a disclosure that a property’s previous owner or occupant died of AIDs or was HIV positive has been determined to constitute illegal discrimination against the handicapped under the federal Fair Housing Act.
Question: I have a listing for an REO (bank-owned) property in the District of Columbia which is still occupied by a tenant of the owner who was foreclosed upon. The bank now wishes to sell the property. Is the bank as seller required to offer the tenant an opportunity to purchase the property and/or a Right of First Refusal?
Answer: Yes. Title IV of D.C. Law 3-86, “RENTAL HOUSING CONVERSION AND SALE ACT OF 1980” (commonly referred to as the “Tenant Opportunity to Purchase Act” or “TOPA”) requires that, prior to any sale of a residential property occupied by a tenant or “any other person entitled to the possession, occupancy, or benefits of a housing accommodation,” the owner must first provide the person occupying the property with both an Offer of Sale and, if the property is sold to a 3rd party, a Right of First Refusal to match the contract of the 3rd party. There is no exemption in the statute for REO property and thus the bank is subject to the same requirements as any other seller. The forms containing the required notices, which should be provided in both English and Spanish, are listed as GCAAR Form DCDHCD and may also be found at http://dhcd.dc.gov/dhcd/cwp/ view,a,1243,q,641679.asp.
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