Seller disclosure in Oregon: what sellers must tell buyers

Is a disclosure form required by law?

Yes. ORS 105.465(2) says a seller “shall complete, sign and deliver” the sellers property disclosure statement to each buyer who makes a written offer to purchase real property in Oregon. The law covers:

• real property with one to four dwelling units;
• condominium units and timeshare properties not covered by their own disclosure rules;
• a manufactured dwelling owned by the same person who owns the land.

It does not apply to leaseholds. It also does not apply if the buyer tells the seller the property will not be a residence for the buyer or the buyer’s spouse, parent or child. That statement by the buyer is conclusive (ORS 105.465).

The Oregon Real Estate Agency lists the statute among the laws it does not administer. The form itself is printed in ORS 105.464, and the statute requires a form “substantially” like it.

What the form covers

The form is a statement of the seller’s actual knowledge on the date of disclosure. It states that it is not a warranty. Section 2 asks yes, no or unknown questions in ten groups:

1. Title, boundaries, easements, covenants and special tax treatment.
2. Water, including wells, water rights and sprinkler systems.
3. Sewage and septic systems.
4. Insulation.
5. Structure, including roof leaks, remodeling and permits, smoke and carbon monoxide alarms, woodstoves, moisture problems and recalled building materials.
6. Systems and fixtures such as electrical, plumbing and heating.
7. Homeowners association and assessments.
8. Seismic: if the house was built before 1974, has it been bolted to its foundation?
9. General conditions: settling and drainage, fill, fire, flood or landslide damage, floodplain, geologic hazard zone, testing for radon, lead paint or mold, underground tanks, and former illegal drug manufacture.
10. A catch-all question on any other material defect.

The seller signs a statement that the answers are complete and correct to the best of the seller’s knowledge. The buyer signs an acknowledgment that includes a duty “to pay diligent attention to any material defects” the buyer knows of or could discover by diligent observation. The form also advises buyers to pay for their own inspections. See home inspection cost.

Exemptions

ORS 105.470 says the disclosure law does not apply to:

• the first sale of a dwelling never occupied, if the seller gives the buyer a statement naming the building or installation permit numbers and the issuing authority;
• sales by a financial institution that acquired the property as custodian, agent or trustee, or by foreclosure or deed in lieu of foreclosure;
• sales by court-appointed receivers, personal representatives, trustees, conservators or guardians;
• sales or transfers by governmental agencies.

A seller claiming an exclusion fills out only Section 1 of the form, and the buyer acknowledges the claim.

What happens if a seller does not disclose

Two other rules matter. The seller carries the burden of proving the form was lawfully delivered (ORS 105.485). And the disclosure law does not limit “any preexisting common law or statutory right or remedy including actions for fraud, negligence or equitable relief” (ORS 105.490).

The form is the seller’s statement only. Neither a lender nor a real estate licensee makes or guarantees it (ORS 105.480). A licensee must tell a represented seller about the seller’s duties and a represented buyer about the buyer’s rights (ORS 696.870).

Federal lead-based paint rule (homes built before 1978)

Separately from the Oregon form, federal rules apply to housing built before 1978. According to the EPA, the seller must:

• give the buyer the pamphlet “Protect Your Family From Lead In Your Home” before the buyer signs the contract;
• disclose known lead-based paint information, including records and reports;
• include a Lead Warning Statement in the contract or as an attachment;
• allow the buyer 10 days to arrange a paint inspection or risk assessment, a period the parties may change in writing and the buyer may waive;
• keep a signed copy of the disclosures for three years after closing.

For the sale steps around these forms, see home buying steps. Questions about a particular sale are best put to an Oregon attorney.