Completion and service of disclosure form before conveyance of property; discovery or worsening of defect after service of form; exceptions; waiver.
1. Except as otherwise provided in subsections 2 and 3:
(a) At least 10 days before residential property is conveyed to a purchaser:
(1) The seller shall complete a disclosure form regarding the residential property; and
(2) The seller or his agent shall serve the purchaser or his agent with the completed disclosure form.
(b) If, after service of the completed disclosure form but before conveyance of the property to the purchaser, a seller or his agent discovers a new defect in the residential property that was not identified on the completed disclosure form or discovers that a defect identified on the completed disclosure form has become worse than was indicated on the form, the seller or his agent shall inform the purchaser or his agent of that fact, in writing, as soon as practicable after the discovery of that fact but in no event later than the conveyance of the property to the purchaser. If the seller does not agree to repair or replace the defect, the purchaser may:
(1) Rescind the agreement to purchase the property; or
(2) Close escrow and accept the property with the defect as revealed by the seller or his agent without further recourse.
2. Subsection 1 does not apply to a sale or intended sale of residential property:
(a) Between any co-owners of the property, spouses or persons related within the third degree of consanguinity.
(b) Which is the first sale of a residence that was constructed by a licensed contractor.
(c) By a person who takes temporary possession or control of or title to the property solely to facilitate the sale of the property on behalf of a person who relocates to another county, state or country before title to the property is transferred to a purchaser.
3. A purchaser of residential property may waive any of the requirements of subsection 1. Any such waiver is effective only if it is made in a written document that is signed by the purchaser and notarized.
Last modified: February 27, 2006