Changes to the Real Estate Condition Report - Sale of Real Estate
August 10, 2018
With the passage of the 2017 Wis. Act 338, the statutory Real Estate Condition Report (“RECR”) tripled in size. The new RECR became effective on July 1, 2018. The RECR was already a troublesome document for sellers because it requires sellers to give their opinions on defects to real estate issues only known by professionals in the field of construction, development, legal, zoning, etc. What makes matters worse is that the application of the current law provides an opportunity for buyers to sue sellers for double and triple damages, including attorney’s fees, should the seller accidentally, unintentionally, or without knowledge fail to check one of the now over 48 separate boxes. The RECR is so onerous on sellers that entire law firms have cropped up solely dedicated to litigation of these reports.
The new RECR also provides further protections for realtors. The RECR now includes a statement that says, “Real estate licensees may not provide advice or opinions concerning whether or not an item is a defect for the purposes of this report, the legal rights or obligations of parties to a transaction.” The new RECR provides little to no protections for Sellers.
Our law firm addressed the issue with RECR in our prior blog post dated , which you can find at the link here: http://www.clairlawoffices.com/archive/201411.
Fortunately, Wisconsin Statute §709.08 clearly provides the buyers the right to waive a RECR. We advise our Clients not to miss out on this opportunity to transfer liability as a seller to the buyer’s professional due diligence.
This is not simply a form you must sign to sell your property. Anyone that tells you otherwise is not representing your best interests. Due to the fact that there are over 48 important issues that can arise as a result of the RECR, Sellers should have a real estate attorney review the report with them prior to delivery of the document to the realtors as part of the listing agreement and prior to any potential buyers.
Please feel free to contact our office should you have any issues related to real estate in Walworth County, especially if it deals with Real Estate Condition Reports.