Owners’ Association Disclosure Form and sales of vacant land

QUESTION: An agent in my firm and I have had a friendly disagreement about whether agents are required to use the Owners’ Association Addendum (Standard Form 2A12-T) every time we complete contract documents relating to the sale of vacant land. My friend says that, if you read the “Note” at the top of the form, it confirms that the form should be used whenever the Residential Property and Owner’s Association Disclosure Statement is not required. My belief is that the form is not required unless the land is in a planned community that is subject to regulation by an owners’ association and there is a dwelling on the land. Which one of us is correct?

ANSWER:  You are.

The disclosures in Form 2A12-T are very similar to disclosures that were added to the Residential Property and Owners’ Association Disclosure Statement (the “RPOADS”) a number of years ago. Because of that similarity, and to avoid duplication of effort, a Note was added to Form 2A12-T to confirm that where a RPOADS has already been completed, completion of Form 2A12-T is not required.

Since the modification of the RPOADS, the purpose of Form 2A12-T is to provide a means for sellers to make disclosures and representations to buyers regarding any owners’ associations to which the property is subject, in those circumstances when a RPOADS is not required. One of those circumstances is the sale of vacant land; the disclosures mandated by the Residential Property Disclosure Act are only triggered when there is a transfer of “residential real property that consists of not less than one nor more than four dwelling units.”

Clearly, not all sales of vacant land involve property that is subject to regulation by an owners’ association. Where the land being sold is not subject to such regulation, Form 2A12-T would serve no purpose. In those circumstances, use of the form is not necessary. On the other hand, if a parcel of vacant land is subject to regulation by an owners’ association, Form 2A12-T may be included as part of the contract by agreement of the parties, but it is not required by law.

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