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Just over a year ago, we told you that NCREC had begun work on revamping the Residential Property and Owners’ Association Disclosure Statement (RPOADS), and now the new one is finally here!
At their March 13th Meeting, The North Carolina Real Estate Commission (NCREC) has approved significant updates to the RPOADS. Once released, Brokers should begin using the new form on July 1, 2024. As real estate professionals navigating the dynamic landscape of property transactions, you must grasp these changes to guide your clients effectively. This article delves into the principal differences between the old form (REC 4.22) and the new form (REC 4.23), shedding light on what these alterations mean for your practice.
Click the button below to download a preliminary copy of the new RPOADS from the NCREC March 13th Meeting Agenda.
NOTE: While this was approved, the commission members did mention some slight modifications to the form formatting, so this is not the final version and should not be used with consumers. The final version to be used with consumers will be posted soon on the NCREC website.
Enhanced Clarity and Specificity
The revised RPOADS form introduces a more structured and detailed approach to disclosing property conditions. The new form segments questions into distinct sections, such as Structure/Floors/Walls/Ceiling/Window/Roof (Section A) and HVAC/Electrical (Section B), making it easier for sellers to provide comprehensive information and for buyers to understand the property's condition.
Expanded Sections on Property Features
One notable enhancement is the detailed inquiry into the dwelling's characteristics and systems. The new form requests information on elements like the dwelling's heat and cooling sources, including specific types (e.g., furnace, heat pump, baseboard) and the number of units or bedrooms with such features. This granularity aids in painting a clearer picture of the property's infrastructure for prospective buyers.
Introduction of Environmental and Flooding Sections
The updated form more explicitly addresses environmental concerns and flood risks. Sections F (Environmental/Flooding) inquire about the presence of hazardous materials, past flood damage, and any related insurance claims. These additions reflect a growing emphasis on environmental factors in property transactions, aligning with buyers' increasing concerns about these issues.
Detailed Owners' Association Disclosure
Section H significantly expands on the disclosure requirements related to owners' associations. It asks for detailed information about dues, special assessments, and any fees associated with the conveyance or transfer of the property. This section ensures that buyers are well-informed about any financial obligations or legal matters related to the property's association, reducing surprises post-purchase.
Implications for Real Estate Agents
The revisions to the RPOADS form underscore the importance of diligence and transparency in property transactions. As an agent, you play a pivotal role in ensuring that your clients—both sellers and buyers—are aware of and understand these changes. Here are a few tips to navigate the updated disclosure requirements:
Educate Your Sellers: Inform your seller clients about the new disclosure requirements and the importance of providing accurate and comprehensive information.
Guide Your Buyers: Advise your buyers to thoroughly review the updated disclosure statements and consider additional inspections if any disclosures raise concerns.
Stay Informed: Keep abreast of any further updates from the NCREC and participate in continuing education opportunities related to disclosure requirements.
Protecting Consumers
The longer, updated RPOADS form represents a significant shift towards greater transparency and informed decision-making in the North Carolina real estate market. By understanding and adapting to these changes, you can better serve your clients and facilitate smoother, more transparent property transactions.
What do you think of the new RPOADS? Let us know in the comments or share with a colleague in an upcoming CE Class!
I see the new RPOADS left out any information about the leasing or ownership of propane tanks. I would have liked them to include a space for the seller to fill in the utility providers and schools since that is information needed. And lastly, I would have preferred that the places for the parties to initial be formatted in the same way as all our other documents. Buyers initials side by side, seller initials side by side. One line at the bottom of the page.