Estate listings and Disclosure Statements
QUESTION: I’m listing a property that’s in an estate. I’ve gotten the listing agreement signed by the heirs and their spouses and by the personal representative who’s been appointed to administer the estate. Since it’s in an estate, I don’t have to get them all to sign a Residential Property and Owners’ Association Disclosure Statement, do I?
ANSWER: Yes and no. Although there is an exemption in the Residential Property Disclosure Act (the “Act”) for estate-related transfers, the exemption is limited to “[t]ransfers by a fiduciary in the course of the administration of a decedent’s estate” (see NC General Statutes Section 47E-2(a)(3)). The “fiduciary” is the personal representative of the estate (called an “executor” if the owner died with a will and an “administrator” if he or she died without a will). So the personal representative doesn’t have to sign a Residential Property and Owners’ Association Disclosure Statement, but the heirs are not exempt so they do need to sign a Disclosure Statement. How about their spouses? Although the spouses of the heirs will most certainly have to sign any deed to the property if it’s sold in order to release potential marital rights they have in the property, they do not have to sign the Disclosure Statement because they are not owners as that term is used in the Act.
In addition to getting the heirs to sign a Residential Property and Owners’ Association Disclosure Statement, you also need to get them to complete and sign the new Mineral and Oil and Gas Rights Mandatory Disclosure Statement that went into effect January 1st of this year. The same exemption mentioned in the preceding paragraph exempts the personal representative from having to sign the new MO&G Disclosure Statement.
There are eleven exemptions listed in Section 47E-2 of the Act. Most of them are quite narrow in their scope, and you should always consult the list of exemptions rather than assuming that a transaction is exempt simply because the property is or was in an estate, sold at foreclosure, owned by a bank, etc. If you still have questions, check with your broker-in-charge. Note also that the 3 exemptions listed in 47E-2(b) are not available in transactions where the new Mineral and Oil and Gas Rights Mandatory Disclosure Statement applies.
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