PRDS To Release Revised Supplemental Seller’s Checklist
By David Hamerslough
The PRDS Forms Committee will be releasing a revised Supplemental Seller’s Checklist shortly. This article provides an overview of some of the changes that have been made to that important disclosure form.
The “Caution To Seller” and “Caution To Buyer” sections have been shortened. Most of the language that had been in these sections is now found in the PRDS Seller Advisory Regarding Completing Disclosure Forms or other Advisories. Sellers should review the Seller Advisory before filling out their disclosures.
Question One, entitled “General Property Information,” in the original version has been eliminated. Questions regarding approximate age of any structure and how long the Seller has owned the Property are now contained in a new section entitled “General and Miscellaneous Issues, Condition, and/or Problems.” Information regarding any discrepancies in the square footage of the residence or the lot itself should be contained in the PRDS Square Footage Advisory and Disclosure form. prepared by the real estate professionals.
Part I of the revised SSC now contains a set of definitions for terms that are used throughout the form. The defined terms are “Disclosures,” “Reports,” “Documents,” “Work,” and “Maintenance” and “Maintain.” As is true with the Purchase Agreement, terms in any of the questions that start with a capital letter, are specifically defined and Sellers should refer to the full definitions listed in Part One of the SSC. This method avoids the necessity to continuously explain important words and will allow Sellers to respond as fully as possible to the questions asked
There are revisions to what was Question 2 of the SSC involving “Alterations, Additions, and Repairs.” The new SSC separates this question into Parts II and III. Part II asks Sellers whether they have possession of any Disclosures and/or Reports regarding the Property that they received before their ownership and whether they have received any Reports regarding the Property during their ownership. If Sellers respond “Yes” they are directed to attach all such Disclosures and Reports to the SSC. The definition of “Disclosures” includes TDSs, SSCs, SPQs, ESDs, AVIDs, etc., and the definition of “Reports” includes structural, pest, general home inspection, contractor inspection, geological or soils reports, roof reports, engineering reports, etc.
Part III of the revised SSC reformats the questions and information previously contained in Question 2 of the old SSC and asks Sellers to indicate whether they have any Documents regarding any Work done on the property prior to or during their ownership. The terms “Documents” and “Work” are defined in Part I. “Documents” includes not only Disclosures and Reports (also defined terms in Part I) but also a broad spectrum of other papers that may contain or provide information about the Property such as photographs, pictures in any format, warranties, information and operational manuals, permits, and letters and/or electronic communications (including emails and social media postings). If Sellers have any Documents, Reports, and/or Disclosures that relate to any Work that was done at the property, these Documents are to be attached to the SSC. Throughout the revised SSC, if Sellers have Documents responsive to a question, they are prompted to attach those Documents to the SSC so as to make the Sellers’ responses as complete as possible.
The defined term “Work” includes but is not limited to alterations, improvements, modifications, additions, corrections, and/or repairs to any component or aspect of the property, whether or not there is an issue, condition, and/or problems with the Property.
Part III includes the space for Sellers to identify what Work was done, who performed the Work, whether that individual/entity was licensed, whether permits were obtained, and whether the Work was finaled. The last section of Part III asks Sellers to identify whether they experienced any “issues, conditions, and/or problems” with the Work and, if so, asks the seller to provide the nature of the issue, condition, and/or problems, what steps were taken to prevent same, who did the corrective Work, etc.
New Part IV is a separate section regarding “Maintenance.” The definitions of Maintenance and Maintain include any Work or necessary tasks that are ongoing and/or repeated over any period of time to avoid or prevent an issue, condition, and/or problems with the Property, any component of the Property, or any equipment at the Property from occurring and/or recurring.
Sellers are asked to describe what they or others acting on their behalf have done to Maintain the Property, whether there is any Maintenance that has been recommended by anyone else and, if so, what Maintenance has actually been done, and finally whether there is any Maintenance that has not been done or has been deferred.
New Part V, entitled “Specific Disclosures” reorganizes what had been included in Paragraphs 3-6 and Paragraph 9 of the old SSC. The first section addresses water intrusion into, from, and through any structures on the Property. The questions start with the roof and/or gutters and end up with the basement and/or crawlspaces. This Section is intended to be a top-to-bottom disclosure by Sellers to provide complete information about water intrusion regardless of its location. Questions about water intrusion had previously been scattered throughout the old SSC; the revised SSC combines them into one stand-alone Section. This Section, as is true in most other Sections of the new SSC, asks Sellers to describe any issue, condition, and/or problems that they experienced or know about and what corrective Work was done.
New Section C of Part V contains questions regarding cracks, settlement, movement, slippage, or instability and seeks information regarding the use of foundation jacks, pier supports, shims, or other devices that might have been used at the Property. A separate, follow-up question asks Sellers to provide detailed information about the issue, condition, and/or problem that necessitated the use of those corrective devices, etc.
The topics of “Surface/Subsurface Water/Moisture Control” “Soils” have been reformatted into new Sections B and C. Each issue, condition, and/or problem requires an affirmative or negative response from Sellers with respect to the Property and/or any adjacent property. Requiring Sellers to answer “Yes” or “No” to each individual question rather than simply allowing them to check a single box that they are not aware of anything will hopefully prevent Sellers from overlooking any of the separate components within those questions. This type of change has been made throughout the revised SSC where ever applicable.
Part V contains separate sections relating to “Exterior Elements” and “Interior Elements.” Section E asks questions related to the repair, restoration, and/or replacement of any exterior element, including the roof, gutters, downspouts, decks, balconies, siding, windows, etc. The questions regarding the Interior Elements in Section F are largely the same as in the old SSC, with the exception that anything related to water damage or leaks are now in the separate “Water Intrusion” section.
The revised SSC now contains definitions for sections relating to heating systems, air conditioning, electrical systems (including a separate section on photovoltaic/solar electrical systems), water supply or water plumbing systems, and, if applicable, the sewer and/or septic system. The sections on each system now identify some of the components that normally make up that particular system. Again, the reference to some of the component parts is designed to help prevent Sellers from overlooking various components of a system when responding to questions about that system.
The section formerly entitled “Television/Phone/Electronics” has been updated, including a new title: “Communication Devices, Entertainment Devices, Security Systems.” The questions have been revamped to reflect technological advances, including communication data cabling and integrated communication systems.
The section on electrical systems, fixtures, and appliances now distinguishes between a conventional electrical system and a photovoltaic/solar electrical system. Regarding the latter, Sellers are asked to identify whether that system is owned, leased, and/or financed and to attach copies of all applicable Documents, such as contracts, leases, notes, security instruments, etc.
The sections on Title/Ownership/Litigation and the last general section contain new questions regarding issues that were previously not dealt with in the old SSC. For example, Sellers are now asked whether the Property has ever been rented and, if so, when, by whom, for how long, and who was managing the Property. There is also a new question regarding whether Sellers are aware of any lease or rental agreement that is, or is claimed to be, currently in effect.
The General/Miscellaneous Section now asks Sellers to identify if there has been any type of fire (including a chimney flue fire) that has occurred to the interior or exterior of the Property. Sellers are also asked if there are any garage door openers/remote controls and, if so, how many and are the controls functioning. There is also a question asking Sellers if they are aware of any postings regarding the Property and/or the neighborhood on any community bulletin board, blog, or any type of social media.
This article is intended to be just an overview of the revisions to the SSC; it is not intended to identify each and every modification that has been made. Please take the time to review the SSC in its entirety when it becomes available and provide the PRDS Forms Committee with any comments.