Exceptions to Real Estate Disclosure Requirements

Exceptions to Real Estate Disclosure Requirements

   Question: In your columns you are always talking about the obligation to disclose a “nasty neighbor.” Our next door neighbor’s 17-year-old son was recently arrested for sexually assaulting a 12-year-old girl. He is back home after posting bail.

We have a daughter and are immediately listing our Glendale home for sale. Our real estate agent said, however, that we do not have to disclose to a buyer this sexual assault by our next door neighbor’s 17-year-old son. Wouldn’t any buyer with small children want to know about this sexual assault by our next door neighbor’s 17-year-old son? Isn’t our neighbor’s 17-year-old son a “nasty neighbor?” What happened to Megan’s Law?

  Answer: A seller of a home, or a real estate agent, generally has to disclose to a buyer material adverse facts that a reasonable buyer would want to know, e.g., roof damage, termites, and nasty neighbors. Arizona law, however, does not require a seller or a real estate agent to disclose to a buyer all material adverse facts. Not required to be disclosed by a seller or a real estate agent are: any natural death, suicide, or a murder or other felony that occurred in the home; occupants of the home with HIV/AIDS; and sex offenders living in the vicinity of the home. ARS § 32-2156.

Therefore, although your next door neighbor’s 17-year-old son is probably a “sex offender,” and a reasonable buyer would likely want to know this information, no disclosure to a buyer is required by you or a real estate agent.

  Note: Megan’s Law is a federal law named after Megan Kafka, a 9-year-old New Jersey girl, who was sexually assaulted and killed by two convicted sex offenders who lived across the street. Megan’s Law, however, does not apply to any disclosure obligation of the seller or a real estate agent. Megan’s Law requires local law enforcement authorities to disclose to the community the existence of a convicted sex offender.

Arizona and local law enforcement does so by requiring convicted sex offenders to maintain an updated place of residence as a condition of their release, and by issuing multiple types of required “community notification,” including neighborhood distribution of flyers with a photograph of the convicted sex offender, and convicted sex offender information posted on the Arizona Department of Public Safety website.