Real Estate Disclosure

Presented by Judy Hills

Eastern Carolina Council of Government

Director Economic and Community Development

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Definition of terms

AICUZ—air installation compatible use zoneDb—a measurement of noiseLdn—a measurement of noise—blended—day/nightAPZ—Accident Potential Zone

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What is a real estate disclosure statement?

Real Estate Disclosure: Information concerning a specific piece of real estate provided the buyer, lessee, or renter by the owner or authorized representative.

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Who’s concerned?

MilitaryProspective buyers/rentersVeterans’ Administration (VA)HUDCraven County—if property in AICUZCarteret County—if property in AICUZ

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Military is concerned

Desire compatibility with base and communityNeed to complete training missionsFlight operations cause noiseFlight operations cause increased potential for accidents in some areas

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Prospective Buyers/Renters Concerned

Don’t like surprises, especially at the last minuteExpect others to “play fair”Need data to make an informed decisionEven local military may not realize noise or safety issues of a particular parcel

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VA is concerned

Appraisal report must identify airport noise or safety zone

Sound attenuation may be required for new structures

Buyer must sign statement that he knows risks

Some noise/safety zones make property ineligible for a VA loan

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HUD concerned—Airport Noise

If property lies in area exceeding 75 db, the site should be rejectedIf lies in area 65-75 db—must be mitigated by appropriate sound attenuation measures

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HUD is concerned—APZs

HUD will not accept proposed construction cases and existing dwellings less than one year old if the property is located within Accident Potential Zone I at Military Airfields

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HUD continued

Applications are not acceptable for existing dwellings if major modernization or rehabilitation is involved. Any project which significantly prolongs the physical life of existing units or increases the density or number of people at the site will render the property unacceptable.

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HUD continued

Approved Appraisers, Direct Endorsement mortgagees and approved HUD lenders must all be made aware of these requirements and be provided copies of appropriate maps.

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HUD continued

Appraisers are responsible for identifying properties affected and must condition acceptance on notification being provided to the prospective purchaser.

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HUD continued

Mortgagees are responsible for inserting the the name of the airport on the Notice and ensure that the prospective purchaser receives the notification at the time loan application is initiated.

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Craven County AICUZ area

a/k/a Marine Corps Air Station Zoning OrdinanceEast of Havelock near NC Hwy. 101 and NC Hwy. 306—Harlowe areaItem 7.0 addresses disclosure—specific notice is required to be given on sale or lease

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Are real estate disclosures utilized in North Carolina?

Yes, NCGS 47E requires owners of residential real estate to furnish purchasers, renters or lessees a property disclosure statement.

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Any weaknesses?

47E-4 (a)(1) and (2) allows the property owner to disclose information or make “no representation.”

47E-2 allows 11 exemptions, including:

1. first sale of dwelling never inhabited;2. the lease -with - option to purchase contracts; and, 3. the transfer between parties when

both agree not to prepare one.

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Weaknesses of Disclosure (con’t)

Buyer, lessee,or renter may not be given adequate time to study the disclosure statement since it can be withheld until closing.

Focus is on conditions within the property lines (i.e. condition of buildings, floodplains, etc) not on external impacts.

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What are external impacts?

Actions or events that impact on a property, particularly negative ones, but are not physically located on the site such as high noise levels (65+Ldn), or being in Accident Potential Zones (APZ’s) because of nearby airfield operations.

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Why is it important to disclose external impacts?

“Disclosure of aviation noise (and APZ’s), as part of a mix of preventive techniques, can be a very important tool in informing and forewarning prospective buyer and tenants about the expected impacts of aviation noise (and APZ’s) on properties within impact areas.”*Words in parenthesis added; not part of original statement.

Source: 14 CFR Part 150 U.S. Dept of Transportation, Federal Aviation Administration, p. 5

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Importance (con’t) “Mandatory disclosure would ensure that prospective homebuyers are knowledgeable about the airport operations and its potential impact on the community, subsequently reducing frustration and anti-airport cynicism by those who were not adequately informed prior to their purchase.”

Source: Comments by the American Association of Airport Executives to the FAA on proposed Aviation Noise Abatement Policy 2000

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How do you implement mandatory disclosure?

Long Term:Lobby NC General Assembly to modify G.S. 47E Real Estate Disclosure Form to require mandatory disclosure of external impacts around military installations

Short Term: Recommend political jurisdictions notify

property owners by letter in impacted areas-- high noise contours (65Ldn) and APZ’s --which requires the seller to disclose that information on the real estate disclosure form;

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Implement (con’t)Require noise disclosures be attached to municipal/county subdivision plats and deeds;

Mandate APZ’s and high noise contours(65Ldn) be attached to real estate disclosure forms; and,

Educate the public on importance of disclosure information through newspaper articles, booklets, maps, signs, etc.

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Does anyone do this now?

The Raleigh-Durham Airport Authority sent certified letters to all property owners within high noise areas around the airport. Since NCGS 47E mandates disclosure of any information received from a political jurisdiction (an airport authority is a political entity), this information must be included on the disclosure form.

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Raleigh-Durham Airport Authority (con’t)

Also, the Raleigh-Durham Airport Authority has a web page that provides general information about airport operations including noise contours and future expansion plans to the general public. It also has tips for buyers and RE agents.http://www.rduaircraftnoise.com/

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Examples (con’t)

3. To help mitigate the noise impacts of night operations of Federal Express at the Triad Regional Airport, the City of High Point plans to:a. mail letters to impacted property owners (noise levels 65+Ldn) requiring notification on real estate disclosure form;

b. Require noise warnings be attached to deeds, plats, etc in areas experiencing high

noise levels (65Ldn+).

Source: E-mail from Lee Burnett, High Point Planning Director

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Examples (con’t)

4. Washington-Beaufort County Board of Realtors has modified their real estate disclosure statement to include information about any proposed OLF (outlying landing field) site.

Source: “OLF Hampers Real Estate Business,” Washington Daily News, October 23, 2003

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Implementation (con’t)

5.The Technical Advisory Committee (TAC) of the East Carolina Joint Land Use Study(JLUS) has prepared a map of Craven and Carteret Counties showing high noise contours (65+Ldn) and APZ’s that was distributed to local realtors and the general public seeking information regarding real estate.

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Examples of disclosure forms

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Hampton Roads Lease DisclosureHampton Roads REALTORS Association ®RESIDENTIAL LEASE ADDENDUMAIRCRAFT NOISE/ACCIDENT ZONE DISCLOSUREThis Addendum is an integral part of the Residential Lease dated _____________________, 20_______ ("Lease") between _________________________________________________________________________ "Owner") and______________________________________________________________________________ ("Tenant") and_____________________________________________________________________________________ ("Agent")for the following property:

Aircraft noise and/or accident zones are subject to change. If the Property is located in Southside Hampton Roads,Buyer and Seller hereby acknowledge that as of the date of this Agreement current maps indicate the Property is

located in an Aircraft Noise Zone ________and/or Aircraft Accident Potential Zone ______. Noise attenuationmeasures for new residential construction or modifications to nonconforming structures may be required and height restrictions may have been imposed in accordance with city ordinances.

___________________________________________________________________________________(OWNER/AGENT)( DATE)

___________________________________________________________________________________(TENANT) (DATE)

___________________________________________________________________________________(TENANT) (DATE)

Copyright 1997,2003 Hampton Roads Association of REALTORS®.

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Hampton Roads Purchase Disclosure

Hampton Roads REALTORS Association ®PURCHASE AGREEMENT ADDENDUMAIRCRAFT NOISE/ACCIDENT ZONE DISCLOSUREThis Addendum is an integral part of the Purchase Agreement dated _________________, 20______ ("Agreement")between __________________________________________________________________________ ("Buyer") and_________________________________________________________________________________ ("Seller") and____________________________________________________________________________ ("Listing Firm") and____________________________________________________________________________ ("Selling Firm") and_______________________________________________________________________________ ("Buyer Broker")(Listing Firm, Selling Firm, and Buyer Broker are individually referred to as "Broker" and collectively, "Brokers") forall that certain piece, parcel or lot of land described as follows:

("Property").Aircraft noise and/or accident zones are subject to change. Buyer and Seller hereby acknowledge that as of the date ofthis Agreement, current maps indicate that the Property is located in an Aircraft Noise Zone ____________ and /orAircraft Accident Zone ________________. Due to above average noise levels, new residential construction andmodifications to nonconforming residences in Noise Zones M, 2, and 3 in the City of Virginia Beach must beconstructed in accordance with standards issued by the City of Virginia Beach._________________________________________ ___________________________________________(SELLING FIRM OR BUYER BROKER) (BUYER) (DATE)By: _____________________________________ ___________________________________________(DATE) (BUYER) (DATE)_________________________________________ ___________________________________________(LISTING FIRM) (SELLER) (DATE)By: _____________________________________ ___________________________________________(DATE) (SELLER) (DATE)Copyright 1997,2003 Hampton Roads REALTORS Association ®

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Beaufort Co., SC Disclosure Statement

What are AICUZ Zones? How do they affect you?

Section 4.17.10.1 Disclosure Statement Form

No person shall sell any property within the airport hazard area unless the prospective buyer has been given the following notice. To_______________(purchaser): The property at (address/location) is located within hazard area of the airport. Beaufort County has determined that persons on the premises will be exposed to a significant noise level and accident potentials as a result of the airport operations. The County has established certain noise zones and accident potential zones (APZs).

The above property is located in Airport Zone and in Accident Potential Zone and Airport Environs Area .

The County has placed certain restrictions on the development and use of property within airport environ areas. Before purchasing the above property, you should consult the Beaufort County Development Administrator to determine the restrictions which have been placed on the subject property.

CERTIFICATIONAs the owner of the subject property, I hereby certify that I have informed , as a prospective purchaser, that the subject property is located in an airport hazard area.

Dated this day of _________, 20__.

Witness , Owner __________________________.

As a prospective purchaser of the subject property, I hereby certify that I have been informed that the subject property is in an airport hazard area, and I have consulted the Beaufort County Development Administrator to determine the restrictions which have been placed on the subject property.

Dated this day of , 20.

Witness , Purchaser _______________________.  

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What else is happening?

Craven and Carteret County GIS maps disclose accurate sound zone and APZ informationCraven County GIS site provides sample disclosure formCarteret County GIS site provides sample disclosure formPublic education Realtor education

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Handouts

Map/brochures: Living with the base next doorCarteret County AICUZ Disclosure FormCraven County Ldn informationCraven County AICUZ Disclosure Form from websiteCraven County AICUZ Disclosure Form from Planning Department’s website

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Questions?