47-10-02.1. Property disclosure - Requirements - Exceptions

47-10-02.1. Property disclosure - Requirements - Exceptions

1. Unless the transaction is exempted under subsection 7, this section applies to a

transaction for the sale, exchange, or purchase of real property if:

a. A real estate broker, real estate broker associate, or real estate salesperson who

is associated with a real estate brokerage firm represents or assists a party to the

transaction; and

b. The real property is a residential dwelling with no more than four units located in

this state being sold or exchanged by the owner.

2. Except as otherwise provided in an offer to purchase agreement, before the parties

sign the final acceptance of the purchase agreement for the sale, exchange, or

purchase of the real property, the seller in a transaction subject to subsection 1 shall

prepare a written disclosure form and shall make the written disclosure form available

to the prospective buyer. The written disclosure form must include all material facts the

seller is aware could adversely and significantly affect an ordinary buyer's use and

enjoyment of the property or any intended use of the property of which the seller is

aware. The written disclosure form must be in the form of the written disclosure form

established by the North Dakota real estate commission under subsection 4 or in a

substantially similar form and must include latent defects, general condition,

environmental issues, structural systems, and mechanical issues regarding the

property. The seller shall complete the written disclosure in good faith and based upon

the best of the seller's knowledge at the time of the disclosure.

3. If a real estate broker, real estate broker associate, or real estate salesperson who is

associated with a real estate brokerage firm represents or assists a party to the

transaction, following the sale, exchange, or purchase of real property, the brokerage

firm shall retain a copy of the written disclosure completed and signed by the seller

and signed by the prospective buyer. The brokerage firm's duties under this section do

not supersede any other common law or statutory duties.

4. The North Dakota real estate commission shall establish and make available a written

disclosure form meeting the requirements of this section. In establishing the form, the

commission shall consult with stakeholders, such as professional organizations.

5. If a real estate broker, real estate broker associate, or real estate salesperson who is

associated with a real estate brokerage firm violates this section, the state real estate

commission may investigate and take disciplinary action under section 43-23-11.1.

6. Unless the transaction is subject to subsection 1 or exempted under subsection 7, the

seller of real property that is a residential dwelling with no more than four units located

in this state being sold or exchanged by the owner shall comply with the provisions of

this subsection. Except as otherwise provided in an offer to purchase agreement,

before the parties sign the final acceptance of the purchase agreement for the sale,

exchange, or purchase of the real property, the seller in a transaction subject to this

subsection shall disclose to the buyer, in writing, all material facts the seller is aware

could adversely and significantly affect an ordinary buyer's use and enjoyment of the

property or any intended use of the property of which the seller is aware. The written

disclosure may be in the form of a written property disclosure form.

7. This section does not apply to transactions for the sale, exchange, or purchase of real

property made:

a. Pursuant to a court order;

b. Between government agencies;

c. By a mortgagor in default to a mortgagee;

d. Pursuant to a foreclosure sale;

e. By a mortgagee or a beneficiary of a deed of trust who acquired the real property

by a:

(1) Foreclosure;

(2) Deed in lieu of foreclosure; or

7. This section does not apply to transactions for the sale, exchange, or purchase of real

property made:

a. Pursuant to a court order;

b. Between government agencies;

c. By a mortgagor in default to a mortgagee;

d. Pursuant to a foreclosure sale;

e. By a mortgagee or a beneficiary of a deed of trust who acquired the real property

by a:

(1) Foreclosure;

(2) Deed in lieu of foreclosure; or

(3) Collateral assignment of beneficial interest;

f. By a fiduciary administering a decedent's estate, guardianship, conservatorship,

or trust;

g. Between co-owners of the real property;

h. To a spouse, child, parent, sibling, grandchild, or grandparent; or

i. If the real property is newly constructed residential real property with no previous

occupancy.