(A) As used in this
section:
(1) “Good faith” means
honesty in fact in a transaction involving the transfer of
residential real property.
(2) “Land installment
contract” has the same meaning as in section 5313.01 of the
Revised Code.
(3) “Political
subdivision” and “state” have the same meanings as in
section 2744.01 of the Revised Code.
(4) “Residential real
property” means real property that is improved by a building
or other structure that has one to four dwelling units.
(B)(1) Except as
provided in division (B)(2) of this section, this section
applies to any transfer of residential real property that
occurs on or after July 1, 1993, by sale, land installment
contract, lease with option to purchase, exchange, or lease
for a term of ninety-nine years and renewable forever. For
purposes of this section, a transfer occurs when the initial
contract for transfer is executed, regardless of when legal
title is transferred, and references in this section to
transfer offers and transfer agreements refer to offers and
agreements in respect of the initial contract for transfer.
(2) This section does
not apply to any transfer of residential real property that
is any of the following:
(a) A transfer
pursuant to court order, including, but not limited to, a
transfer ordered by a probate court during the
administration of a decedent’s estate, a transfer pursuant
to a writ of execution, a transfer by a trustee in
bankruptcy, a transfer as a result of the exercise of the
power of eminent domain, and a transfer that results from a
decree for specific performance of a contract or other
agreement between persons;
(b) A transfer to a
mortgagee by a mortgagor by deed in lieu of foreclosure or
in satisfaction of the mortgage debt;
(c) A transfer to a
beneficiary of a deed of trust by a trustor in default;
(d) A transfer by a
foreclosure sale that follows a default in the satisfaction
of an obligation secured by a mortgage;
(e) A transfer by a
sale under a power of sale following a default in the
satisfaction of an obligation that is secured by a deed of
trust or another instrument containing a power of sale;
(f) A transfer by a
mortgagee, or a beneficiary under a deed of trust, who has
acquired the residential real property at a sale conducted
pursuant to a power of sale under a mortgage or a deed of
trust or who has acquired the residential real property by a
deed in lieu of foreclosure;
(g) A transfer by a
fiduciary in the course of the administration of a
decedent’s estate, a guardianship, a conservatorship, or a
trust;
(h) A transfer from
one co-owner to one or more other co-owners;
(i) A transfer made to
the transferor’s spouse or to one or more persons in the
lineal line of consanguinity of one or more of the
transferors;
(j) A transfer between
spouses or former spouses as a result of a decree of
divorce, dissolution of marriage, annulment, or legal
separation or as a result of a property settlement agreement
incidental to a decree of divorce, dissolution of marriage,
annulment, or legal separation;
(k) A transfer to or
from the state, a political subdivision of the state, or
another governmental entity;
(l) A transfer that
involves newly constructed residential real property that
previously has not been inhabited;
(m) A transfer to a
transferee who has occupied the property as a personal
residence for one or more years immediately prior to the
transfer;
(n) A transfer from a
transferor who both has not occupied the property as a
personal residence within one year immediately prior to the
transfer and has acquired the property through inheritance
or devise.
(C) Except as provided
in division (B)(2) of this section and subject to divisions
(E) and (F) of this section, every person who intends to
transfer any residential real property on or after July 1,
1993, by sale, land installment contract, lease with option
to purchase, exchange, or lease for a term of ninety-nine
years and renewable forever shall complete all applicable
items in a property disclosure form prescribed under
division (D) of this section and shall deliver in accordance
with division (I) of this section a signed and dated copy of
the completed form to each prospective transferee or
prospective transferee’s agent as soon as is practicable.
(D)(1) Prior to July
1, 1993, the director of commerce, by rule adopted in
accordance with Chapter 119. of the Revised Code, shall
prescribe the disclosure form to be completed by
transferors. The form prescribed by the director shall be
designed to permit the transferor to disclose material
matters relating to the physical condition of the property
to be transferred, including, but not limited to, the source
of water supply to the property; the nature of the sewer
system serving the property; the condition of the structure
of the property, including the roof, foundation, walls, and
floors; the presence of hazardous materials or substances,
including lead-based paint, asbestos, urea-formaldehyde foam
insulation, and radon gas; and any material defects in the
property that are within the actual knowledge of the
transferor.
The form also shall
set forth a statement of the purpose of the form, including
statements substantially similar to the following: that the
form constitutes a statement of the conditions of the
property and of information concerning the property actually
known by the transferor; that, unless the transferee is
otherwise advised in writing, the transferor, other than
having lived at or owning the property, possesses no greater
knowledge than that which could be obtained by a careful
inspection of the property by a potential transferee; that
the statement is not a warranty of any kind by the
transferor or by any agent or subagent representing the
transferor in this transaction; that the statement is not a
substitute for any inspections; that the transferee is
encouraged to obtain the transferee’s own professional
inspection; that the representations are made by the
transferor and are not the representations of the
transferor’s agent or subagent; and that the form and the
representations contained therein are provided by the
transferor exclusively to potential transferees in a
transfer made by the transferor, and are not made to
transferees in any subsequent transfers.
The form shall include
instructions to the transferor for completing the form,
space in which the transferor or transferors shall sign and
date the form, and space in which the transferee or
transferees shall sign and date the form acknowledging
receipt of a copy of the form and stating that the
transferee or transferees understand the purpose of the form
as stated thereon.
(2) Not later than
January 1, 2006, the director shall revise the disclosure
form to include a statement that information on the
operation and maintenance of the type of sewage treatment
system serving the property is available from the department
of health or the board of health of the health district in
which the property is located.
As used in this
section, “sewage treatment system” has the same meaning as
in section 3718.01 of the Revised Code.
(E)(1) Each disclosure
of an item of information that is required to be made in the
property disclosure form prescribed under division (D) of
this section in connection with particular residential real
property and each act that may be performed in making any
disclosure of an item of information shall be made or
performed in good faith.
(2) If an item of
information is unknown to the transferor of residential real
property at the time the item is required to be disclosed in
the property disclosure form and if the approximation is not
used for the purpose of circumventing or otherwise evading
divisions (C) and (D) of this section, the transferor may
make a good faith approximation of the item of information.
(F)(1) A transferor of
residential real property is not liable in damages in a
civil action for injury, death, or loss to person or
property that allegedly arises from any error in, inaccuracy
of, or omission of any item of information required to be
disclosed in the property disclosure form if the error,
inaccuracy, or omission was not within the transferor’s
actual knowledge.
(2) If any item of
information that is disclosed in the property disclosure
form is rendered inaccurate after the delivery of the form
to the transferee of residential real property or the
transferee’s agent as a result of any act, occurrence, or
agreement, the subsequent inaccuracy does not cause, and
shall not be construed as causing, the transferor of the
residential real property to be in noncompliance with the
requirements of divisions (C) and (D) of this section.
(G) Any disclosure of
an item of information in the property disclosure form
prescribed under division (D) of this section may be amended
in writing by the transferor of residential real property at
any time following the delivery of the form in accordance
with divisions (C) and (I) of this section. The amendment
shall be subject to this section.
(H) Except as provided
in division (B)(2) of this section, every prospective
transferee of residential real property who receives in
accordance with division (C) of this section a signed and
dated copy of a completed property disclosure form as
prescribed under division (D) of this section shall
acknowledge receipt of the form by doing both of the
following:
(1) Signing and dating
a copy of the form;
(2) Delivering a
signed and dated copy of the form to the transferor or the
transferor’s agent or subagent.
(I) The transferor’s
delivery under division (C) of this section of a property
disclosure form as prescribed under division (D) of this
section and the prospective transferee’s delivery under
division (H) of this section of an acknowledgment of receipt
of that form shall be made by personal delivery to the other
party or the other party’s agent or subagent, by ordinary
mail or certified mail, return receipt requested, or by
facsimile transmission. For the purposes of the delivery
requirements of this section, the delivery of a property
disclosure form to a prospective co-transferee of
residential real property or a prospective co-transferee’s
agent shall be considered delivery to the other prospective
transferees unless otherwise provided by contract.
(J) The specification
of items of information that must be disclosed in the
property disclosure form as prescribed under division (D)(1)
of this section does not limit or abridge, and shall not be
construed as limiting or abridging, any obligation to
disclose an item of information that is created by any other
provision of the Revised Code or the common law of this
state or that may exist in order to preclude fraud, either
by misrepresentation, concealment, or nondisclosure in a
transaction involving the transfer of residential real
property. The disclosure requirements of this section do not
bar, and shall not be construed as barring, the application
of any legal or equitable defense that a transferor of
residential real property may assert in a civil action
commenced against the transferor by a prospective or actual
transferee of that property.
(K)(1) Except as
provided in division (K)(2) of this section, but subject to
divisions (J) and (L) of this section, a transfer of
residential real property that is subject to this section
shall not be invalidated because of the failure of the
transferor to provide to the transferee in accordance with
division (C) of this section a completed property disclosure
form as prescribed under division (D) of this section.
(2) Subject to
division (K)(3)(c) of this section, if a transferee of
residential real property that is subject to this section
receives a property disclosure form or an amendment of that
form as described in division (G) of this section after the
transferee has entered into a transfer agreement with
respect to the property, the transferee, after receipt of
the form or amendment, may rescind the transfer agreement in
a written, signed, and dated document that is delivered to
the transferor or the transferor’s agent or subagent in
accordance with divisions (K)(3)(a) and (b) of this section,
without incurring any legal liability to the transferor
because of the rescission, including, but not limited to, a
civil action for specific performance of the transfer
agreement. Upon the rescission of the transfer agreement,
the transferee is entitled to the return of, and the
transferor shall return, any deposits made by the transferee
in connection with the proposed transfer of the residential
real property.
(3)(a) Subject to
division (K)(3)(b) of this section, a rescission of a
transfer agreement under division (K)(2) of this section
only may occur if the transferee’s written, signed, and
dated document of rescission is delivered to the transferor
or the transferor’s agent or subagent within three business
days following the date on which the transferee or the
transferee’s agent receives the property disclosure form
prescribed under division (D) of this section or the
amendment of that form as described in division (G) of this
section.
(b) A transferee may
not rescind a transfer agreement under division (K)(2) of
this section unless the transferee rescinds the transfer
agreement by the earlier of the date that is thirty days
after the date upon which the transferor accepted the
transferee’s transfer offer or the date of the closing of
the transfer of the residential real property.
(c) A transferee of
residential real property may waive the right of rescission
of a transfer agreement described in division (K)(2) of this
section.
(d) A rescission of a
transfer agreement is not permissible under division (K)(2)
of this section if a transferee of residential real property
that is subject to this section receives a property
disclosure form as prescribed under division (D) of this
section or an amendment of that form as described in
division (G) of this section prior to the transferee’s
submission to the transferor or the transferor’s agent or
subagent of a transfer offer and the transferee’s entry into
a transfer agreement with respect to the property.
(4) If a transferee of
residential real property subject to this section does not
receive a property disclosure form from the transferor after
the transferee has submitted to the transferor or the
transferor’s agent or subagent a transfer offer and has
entered into a transfer agreement with respect to the
property, the transferee may rescind the transfer agreement
in a written, signed, and dated document that is delivered
to the transferor or the transferor’s agent or subagent in
accordance with division (K)(4) of this section without
incurring any legal liability to the transferor because of
the rescission, including, but not limited to, a civil
action for specific performance of the transfer agreement.
Upon the rescission of the transfer agreement, the
transferee is entitled to the return of, and the transferor
shall return, any deposits made by the transferee in
connection with the proposed transfer of the residential
real property. A transferee may not rescind a transfer
agreement under division (K)(4) of this section unless the
transferee rescinds the transfer agreement by the earlier of
the date that is thirty days after the date upon which the
transferor accepted the transferee’s transfer offer or the
date of the closing of the transfer of the residential real
property.
(L) The right of
rescission of a transfer agreement described in division
(K)(2) of this section or the absence of that right does not
affect, and shall not be construed as affecting, any other
legal causes of action or other remedies that a transferee
or prospective transferee of residential real property may
possess against the transferor of that property.
Effective Date:
03-19-1993; 05-06-2005
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