real estate disclosure.ppt

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  • 1. Real Estate Disclosure Presented by Judy Hills Eastern Carolina Council of Government Director Economic and Community Development
  • 2. Definition of terms
    • AICUZair installation compatible use zone
    • Dba measurement of noise
    • Ldna measurement of noiseblendedday/night
    • APZAccident Potential Zone
  • 3. 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.
  • 4. Whos concerned?
    • Military
    • Prospective buyers/renters
    • Veterans Administration (VA)
    • HUD
    • Craven Countyif property in AICUZ
    • Carteret Countyif property in AICUZ
  • 5. Military is concerned
    • Desire compatibility with base and community
    • Need to complete training missions
    • Flight operations cause noise
    • Flight operations cause increased potential for accidents in some areas
  • 6. Prospective Buyers/Renters Concerned
    • Dont like surprises, especially at the last minute
    • Expect others to play fair
    • Need data to make an informed decision
    • Even local military may not realize noise or safety issues of a particular parcel
  • 7. 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
  • 8. HUD concernedAirport Noise
    • If property lies in area exceeding 75 db, the site should be rejected
    • If lies in area 65-75 dbmust be mitigated by appropriate sound attenuation measures
  • 9. HUD is concernedAPZs
    • 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
  • 10. 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.
  • 11. 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.
  • 12. HUD continued
    • Appraisers are responsible for identifying properties affected and must condition acceptance on notification being provided to the prospective purchaser.
  • 13. 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.
  • 14. Craven County AICUZ area
    • a/k/a Marine Corps Air Station Zoning Ordinance
    • East of Havelock near NC Hwy. 101 and NC Hwy. 306Harlowe area
    • Item 7.0 addresses disclosurespecific notice is required to be given on sale or lease
  • 15. 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 .
  • 16. 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.
  • 17. Weaknesses of Disclosure (cont )
    • 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.
  • 18. 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 (APZs) because of nearby airfield operations.
  • 19. Why is it important to disclose external impacts?
    • Disclosure of aviation noise (and APZs), 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 APZs) 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
  • 20. Importance (cont)
    • 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
  • 21. 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 APZs --which requires the seller to disclose that information on the real estate disclosure form;
  • 22. Implement (cont)
    • Require noise disclosures be attached to municipal/county subdivision plats and deeds;
    • Mandate APZs 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.
  • 23. 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.
  • 24. Raleigh-Durham Airport Authority (cont)
    • 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/
  • 25. Examples (cont)
    • 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
  • 26. Examples (cont)
    • 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