Key Takeaways
- North Carolina requires sellers to complete the Residential Property and Owners' Association Disclosure Statement
- Sellers must disclose known material facts about property condition on the disclosure form
- The disclosure statement must be provided to buyers before they make an offer
- Brokers must disclose material facts they know even if the seller does not disclose them
- Lead-based paint disclosure is required by federal law for homes built before 1978
North Carolina Property Disclosure Requirements
Unlike some states, North Carolina REQUIRES sellers to complete a property disclosure statement.
Residential Property Disclosure Statement
North Carolina law (N.C.G.S. 47E) requires sellers to provide the Residential Property and Owners' Association Disclosure Statement:
When Disclosure is Required
| Property Type | Disclosure Required? |
|---|---|
| Residential (1-4 units) | YES |
| New construction (never occupied) | NO (exempt) |
| Foreclosure sales | NO (limited exemption) |
| Estate sales | Limited disclosure |
| Commercial property | NO |
Timing of Disclosure
The disclosure statement must be provided:
- Before the buyer makes an offer, OR
- At the time of offer if not previously provided
Best Practice: Provide disclosure before showings so buyers are informed.
What Must Be Disclosed
Categories on the Disclosure Form
| Category | Examples |
|---|---|
| Structural | Foundation, roof, walls, floors |
| Systems | HVAC, plumbing, electrical, water heater |
| Water | Water source, septic system, drainage |
| Hazards | Asbestos, radon, lead paint, mold |
| Environmental | Flood zone, wetlands, soil problems |
| Neighborhood | HOA, assessments, disputes, easements |
| Legal | Encroachments, boundary disputes, liens |
Disclosure Response Options
Sellers choose one response for each item:
| Response | Meaning |
|---|---|
| Yes | Condition exists or problem is known |
| No | Seller has no knowledge of issue |
| No Representation | Seller makes no representation |
"No Representation": Seller is not required to investigate or warrant the property's condition.
Material Facts Disclosure
What is a Material Fact?
A material fact is information that would:
- Affect a reasonable buyer's decision
- Impact the property's value
- Relate to the property's condition or use
Broker's Duty to Disclose Material Facts
North Carolina brokers must disclose material facts:
- To ALL parties (not just clients)
- Even if seller hasn't disclosed them
- Even if broker is not the listing agent
Examples of Material Facts
| Must Disclose | Need Not Disclose |
|---|---|
| Known structural defects | Deaths on property |
| Water damage or leaks | Criminal activity at property |
| Environmental contamination | Sex offenders in area |
| Unpermitted additions | Prior occupant's diseases |
| Active infestations | Paranormal activity |
| Known HOA violations | Future development plans (unless known) |
Buyer's Right to Inspect
Due Diligence Inspections
During due diligence, buyers should:
- Hire licensed home inspector
- Conduct specialized inspections (radon, mold, etc.)
- Review all disclosure documents
- Investigate any concerns
Disclosure is Not a Warranty
The disclosure statement:
- Is based on seller's knowledge
- Does NOT guarantee condition
- Does NOT replace buyer inspections
- May say "no representation"
Federal Disclosure Requirements
Lead-Based Paint Disclosure
For homes built before 1978:
| Requirement | Detail |
|---|---|
| EPA Pamphlet | Must provide "Protect Your Family From Lead" |
| Known Lead Paint | Seller must disclose known presence |
| Inspection Right | Buyer gets 10 days to test (can be waived) |
| Form | Specific lead disclosure form required |
When must the North Carolina property disclosure statement be provided to the buyer?
A North Carolina broker learns of a structural defect that the seller has not disclosed. What must the broker do?
Which response option on the NC disclosure allows sellers to not investigate a property condition?