‘One-sided’ disclosure laws didn’t protect buyer in Airbnb error, real estate expert says
Buying a home for the first time can be a daunting experience that comes with its fair share of risk. A Charlotte woman learned that when a person arrived at her recently purchased home after claiming he rented it on Airbnb.
The situation was a result of a scheme that dated back months and was orchestrated by the previous homeowner’s evicted tenant, The Charlotte Observer reported. Natalie Siburt, the woman whose home remained listed on the property website for rent, wasn’t aware.
So, why wasn’t this disclosed before Siburt signed off on buying the home? Because the seller didn’t have anything to disclose.
The Residential Property Disclosure Act, or North Carolina G.S. 47E, requires sellers to complete a Residential Property and Owners’ Association Disclosure Statement — a form that discloses the condition of a property and its defects.
The form is used to detail issues with the home so buyers know upfront what condition the property is in. However, most of the fields on the form require the seller to disclose conditions and defects related to material elements of the property, such as the water tank, roof, or foundation.
The form has to be filled out and provided to potential home buyers. But Liz Koelling, of Matt Stone Real Estate in Charlotte, explained sellers have the option to answer “no representation” for every question.
“In North Carolina, sellers must fill out a property disclosure, but they can choose to answer ‘no representation’ to every question, disclosing nothing about the condition of the property,” Koelling told the Observer.
If that happens, a buyer will have to rely on the listing agent to disclose any other defects they might know about.
“The listing agent must disclose any material facts they are aware of,” Koelling stated. “Most of the time when we talk about material facts, we’re referring to things like the presence of mold or a structural issue, for example.”
Deaths, including murder and suicide, and whether or not a seller believes a home to be haunted do not need to be disclosed to a buyer.
Furthermore, as Siburt discovered, problems with a home’s previous occupant do not need to be made known to a buyer.
A lease that is in effect at the property should be disclosed to a buyer. But by the time Siburt inquired about the house, the previous occupant had already been evicted, the Observer reported.
“The seller should always share if there’s a lease in effect with the listing agent, and the listing agent would be required to disclose that to a potential buyer,” Koelling said. “In (Siburt’s) situation, if there was not a lease currently in place when the seller listed the property, there would not be anything to disclose, assuming the seller truly was not aware of the upcoming Airbnb reservations.”
Koelling told the Observer that experienced buyer agents can help manage risk by knowing what red flags to look out for.
“The disclosure laws in North Carolina are undoubtedly one-sided,” Koelling said. “Not all risk can be avoided, but with the help of an agent, buyers can manage their risk.”
This story was originally published October 25, 2022 at 2:46 PM.
