You may recall that in two recent “Updates” I discussed (1) the apparent demise of “buyer beware” real estate sales, and (2) the designation of much of Tucson as “territory in the vicinity of a military airport.” On the heels of, and perhaps partly in reaction to, those developments, the Arizona Association of Realtors® has produced a new, longer version of the Seller’s Property Disclosure Statement (“SPDS”). If you have bought or sold a residence in the last several years, you have either prepared or been presented with the old version. The new version (which at the time of this writing can be viewed on-line at www.aaronline.com) is considerably longer than the old one (six pages instead of two, although the added length may be partially due to the use of larger type), and asks specific questions about various types of conditions that many people selling their house might never think of as “materially and adversely affecting the value of the property,” to use the legal standard. One example of a condition that is more specifically covered on the new SPDS is the presence of animals or insects. Where the old form asked only a general question about any “termite, insect or pest problems,” the new form asks specifically if “you [have] observed any of the following on the property: scorpions, rabid animals, bee swarms, rodents, owls, reptiles, other?” This raises a number of questions in my mind, such as:
· Does the term “rodents” include the squirrels I have seen on top of my backyard wall? My guess is the author of the form was thinking about the presence of rodents in the house, not the yard. Ground squirrels in the yard could be a problem, however.
· Certainly “reptiles” would include the lizards I see in my yard almost every day in the spring and summer. Does their presence materially and adversely affect the value of the property? Many people would probably consider their presence beneficial, not harmful.
· Would the presence of “owls” materially and adversely affect the value of a residential property? I suppose it could if there were pygmy owls and the buyer planned to construct more buildings on the property. Do you know a pygmy owl when you see one?· How do I know if any of the wildlife I see on my property is “rabid?” If I hear coyotes howling at night, does that count?
One example of a condition that is actually less specifically covered on the new SPDS is the presence of airports. The old form asked: “Is the property located within the territory in the vicinity of a military airport as defined by Arizona law?” That question presumably was included because of the requirement, which was recently repealed (see my December 2001 “Update”), that any transfer of a property within the “territory in the vicinity of a military airport” contain a specific disclosure to that effect. The new form asks instead: “Are you aware if the property is located in the vicinity of an airport (military, public, or private)?” Does the “vicinity” of Davis-Monthan mean the statutory “territory in the vicinity?” If so, and if you live anywhere in mid-town Tucson, then you probably would have to answer “yes” to that question on the form. I cite these examples only to point out that the new SPDS is not perfect and to suggest that it will not prevent a disgruntled buyer from asserting a claim that his or her seller knew about a bothersome condition and failed to disclose it. If the new SPDS at least makes both sellers and buyers aware of problem areas, then it should be of some benefit in reducing the chances of an unpleasant surprise for the buyer, and therefore reduce the risk of a post-sale dispute.