Oregon's Real Estate Disclosure Law: Commercial Property Exemption

Oregon's real estate disclosure laws require sellers to deliver a property disclosure statement to buyers who make a written offer on the property. This statement must be in the form set out by ORS 105.464 and includes questions about the condition of the property. The requirement applies to residential properties with four or fewer dwelling units, as well as condominiums, timeshares, and manufactured dwellings.

However, there are some exemptions to this law. For example, it does not apply to properties with more than five dwelling units or when the buyer intends to use the property for non-residential purposes. Additionally, certain types of sellers, such as financial institutions or court-appointed representatives, are also exempt from the disclosure requirement.

So, while Oregon's real estate disclosure law primarily applies to residential properties, there may be cases where it could apply to commercial properties, depending on the specific circumstances of the sale.

Oregon's Seller Property Disclosure Law

The main exceptions to the disclosure requirement are when selling a property with more than four dwelling units, when selling to someone who will use the property for non-residential purposes, or when selling a home that has never been occupied. Other exceptions include sales by financial institutions, sales by court-appointed representatives, and sales or transfers by a government agency.

If a seller fails or refuses to provide a property disclosure statement, a buyer has the right to revoke their offer at any time prior to closing the transaction. Buyers have five business days from the seller's delivery of the disclosure statement to revoke their offer.

The disclosure statement covers various aspects of the property, including:

• Title to the property and existing encumbrances, such as easements and liens
• Domestic water sources and irrigation
• Insulation, including whether there is insulation in the ceiling, walls, and floors
• Dwelling structure, including whether there are any leaks or unpermitted additions
• Dwelling systems and fixtures, such as electrical and plumbing components
• Common interests, like homeowners' association dues and shared common areas

Exceptions to Oregon's Real Estate Disclosure Requirement

Oregon's real estate disclosure laws apply to the sale of residential real estate, and require the seller to deliver a property disclosure statement to the buyer. However, there are some exceptions to this requirement.

The main exceptions are when selling a property with more than five dwelling units, or when selling to someone who will use the property for purposes other than a residence for them or their spouse, parent or child.

Other exceptions include the first sale of a dwelling that has never been occupied, sales by a financial institution (including by foreclosure or deed in lieu of foreclosure), and sales by court-appointed receivers, personal representatives, trustees, conservators, or guardians.

In these cases, the seller may claim an exclusion and does not need to provide a property disclosure statement. However, if the seller does not qualify for an exclusion, they must disclose the condition of the property or the buyer may revoke their offer to purchase at any time before closing the transaction.

It is important to note that even if an exclusion is claimed, the seller must still disclose any known material defects that could significantly impact the property's value. This includes issues such as toxic mold or a venomous spider infestation.

Overall, while there are some exceptions to Oregon's real estate disclosure requirement, sellers must still be cautious in disclosing any known issues that could affect the property's value or desirability.

What Information Oregon's Property Disclosure Statement Requires Home Sellers to Disclose

In Oregon, a seller's property disclosure statement must follow the form and language provided by the state legislature in the statute, ORS § 105.464. The form requires answers to specific questions about the property's condition, and the seller must answer based on their actual knowledge.

The questions cover the following topics:

• Title to the property and existing encumbrances, such as easements and liens
• Domestic water sources and irrigation
• Insulation, including whether there is insulation in the ceiling, walls, and floor
• Dwelling structure, including whether the roof leaks and whether any unpermitted additions exist
• Dwelling systems and fixtures, such as the electrical and plumbing components of the house
• Common interests, like homeowners' association dues and shared common areas
• Boundary issues
• Electrical problems
• History of standing water on the property
• Presence of smoke and carbon monoxide detectors
• Flood risk and history
• Heating system
• Presence and condition of insulation
• Permitted improvements
• Sewage system
• Foundation and structural problems
• Water supply
• Evidence of water damage
• Federal disclosures, including lead-based paint
• Local disclosures, including deaths in the property, environmental hazards, history of stigmatizing events, and proximity to protected flora, military facilities, power lines, prisons, and registered sex offenders.

What Is Considered a Material Defect in Oregon?

In Oregon, a material defect is a condition that could significantly and negatively impact the value of a property. For instance, toxic mould or a venomous spider infestation could significantly impact a property's value.

The Oregon real estate disclosure statement includes a "catch-all" question to ensure all issues that might influence a buyer's decision to purchase the property are fully disclosed. Specifically, it asks: "Are there any other material defects affecting this property or its value that a prospective buyer should know about?"

Sellers must answer "Yes" or "No" to this question. "Unknown" is not an option. If the answer is "Yes", the seller must provide a written explanation.

While answers to the questions in the disclosure statement need only be based on the seller's "actual knowledge", a buyer might not believe that the seller didn't know about a particularly obvious defect. For instance, if toxic mould is growing under the kitchen sink and the seller fails to disclose it, a buyer could infer that the seller knew about the mould and sue them upon discovering it after the sale.

To avoid such a dispute, it is worth examining closets, drawers, and other easily accessible areas of the house for obvious defects. This is especially important if the seller has not lived in the house recently. However, the seller does not have an obligation to actively investigate or seek out hidden, unknown defects.

Federally Required Disclosures: Lead Paint

In addition to Oregon's state-mandated disclosures, federal law requires a lead paint disclosure for certain older houses. If your house was built before 1978, you must give the buyer both a pamphlet titled "Protect Your Family From Lead In Your Home" and a lead paint disclosure. This is required by 42 U.S. Code § 4852d.

The Lead-Based Paint Disclosure Rule requires sellers, landlords, real estate agents, and property managers to provide specific information about lead-based paint and lead-based paint hazards before prospective renters and homebuyers sign a lease or contract. This requirement applies to most pre-1978 private housing, public housing, federally-owned housing, and housing receiving federal assistance. It is designed to help people make more informed choices based on the information they receive.

Before a homebuyer signs a contract for a housing sale or a renter signs a lease, federal law requires sellers, landlords, real estate agents, and property managers to:

• Give buyers and renters a copy of the "Protect Your Family From Lead In Your Home" pamphlet with information on identifying and controlling lead-based paint and lead-based paint hazards. It is available in multiple languages.
• Disclose any known information about the presence of lead-based paint and lead-based paint hazards in the home or building. This may include the location of the lead-based paint and the condition of the painted surfaces.
• Provide all available records and reports on the presence of lead-based paint and lead-based paint hazards in the housing being sold or leased. For multi-unit buildings, this includes those for common areas and other units from building-wide evaluations.
• Provide a "Lead Warning Statement" to buyers or renters explaining, among other things, that lead from paint can pose health hazards if not managed properly. This can be an attachment to or as language inserted into the contract or lease. This should be in the same language as the rest of the contract. It should include confirmation that the seller or landlord has complied with all requirements under the Lead-Based Paint Disclosure Rule.
• Provide homebuyers a 10-day period to conduct a paint inspection or risk assessment for lead-based paint or lead-based paint hazards. Parties may mutually agree, in writing, to lengthen or shorten the time period for inspection. Homebuyers may waive this inspection opportunity. If a homebuyer is concerned about possible lead-based paint, they may hire a certified inspector to conduct a lead-based paint inspection before committing to buy.
• Keep a signed copy of the disclosures for three years after the sale is completed or the lease begins.

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