Expert: Todd C. Menard - 5/5/2011

Question
recently purchased a house in buckeye,az.The unsigned SPDS said No assessments.6 months later i get a bill from the city for assessments.My realtor said that it was on the MLS listing and that that informed us properly.The sellers did not fill out the SPDS or they would have signed them.we have asked them who filled them out and cannot get an answer.do I have any rights at all in this?

Answer
Hello Verna - Lets take each item separately. To begin, if the seller did not disclose anywhere within the contents of the transaction documentation then there is the possibility that the seller may have failed to disclose a material fact. The MLS is not part of the contract and therefore items included on the MLS are probably not considered proper disclosure. The AAR Residential Purchase Contract includes terms and conditions that protect both parties, and as the contract relates to disclosure of material facts there is no difference. The AAR contract specifically states that the seller is to complete the Seller Property Disclosure Statement (SPDS) disclosing all known material facts with regard to each section of the form and then signing the form attesting to the accuracy of the information provided. REALTORS are taught never to fill out the SPDS. When dealing with HUD, FANNIE MAE, FREDDIE MAC or Bank Owned homes the banks require the buyer to sign a waiver form indicating the buyer will not be receiving an SPDS for the property. If this is acceptable to teh buyer the agent should provide the buyer with a blank SPDS so the buyer is aware of the type of information, disclosure and answers they might have received if the seller had completed the SPDS. Whether an SPDS is provided or not the agent should advise the buyer to perform a property inspection of the premises with an emphasis on looking at the areas the buyer found concerning during their review the SPDS, or items in which the buyer would desire further information. THIS SAID, If the SPDS was not signed by the seller your agent may have some liability here unless the validity of the SPDS was brought to your attention by your agent and your understanding was that the information contained in this SPDS should not be relied upon since the seller never signed it. This is called a red flag. Your agent should have demanded that a signed copy be provided. If the seller after request refused to provide a signed copy this would be another item of concern. The AAR Purchase Contract and required HOA Addendum also have language and require disclosure of Homeowner Association information. In the Contract you are offered the opportunity to select WHO you desire to pay for future and past assessments (those that are a lien and those that are not a lien as of closing) and you liability with regard to your question may be answered there. The HOA Addendum further offers the buyer teh opportunity to determine WHO they want to pay certain HOA obligations. Finally, during the escrow period, you should have been provided a copy of the HOA budget, financials, CC&R's and usually this includes information with regard to assessments. A buyer can find out from a neighbor if there has been any HOA issues that the buyer might desire to investigate futher. If disclosed to you the burden then falls on you to investigate if it is an area of concern (disapproval) for you. If material information (A Material Fact is information that had you known this it would have affected the amount paid for the home, or your decision to purchase the home) was witheld from you, or the information that was provided was later determined to be false, then you probably have a claim and should seek a real estate attorney to assist you with understanding your rights under law. However, the AAR Contract also states that the parties agree to mediation before litigation. Which means you would persue the seller first directly through the brokerage firms, then through the Dispute Resolution Services or outside Mediation Services to resolve the matter. Remember, I am not an attorney and this is not to be considered legal advice, rather it is real estate information any experienced REALTOR should be able to provide. I hope this has been helpful. If you need additional assistance please reply to this email. - Todd C Menard