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Jay J. Spadinger, R - Jay's Blog
Jan. 8, 2007
Tagged with: hawaii real estate, vacant land disclosures
How to Avoid Problems with, C52, C53, and C57 of the Hawaii Sales Contract (DROA), i.e., Disclosures for "Vacant" Land
This post will look at a few of the more troublesome, and sometime abused, paragraphs of the DROA; Paragraphs C-52, C53, and C57, especially as they pertain to Vacant Land. Property Condition Maintenance, Final Walk-Through, & Removal of Items from Property. I recently experienced a transaction where a Broker countered an offer with a deletion of these paragraphs. He stated that he did so because, “they do not apply to vacant land purchases”. Nothing could be further from the truth. This could in fact be a very expensive experience for your Buyer client if allowed to be deleted by the agent on the other side of your transaction. Whether it is vacant land or an “improved” property, those paragraphs are there for a reason: to protect the Buyer client so that they can be assured the property is in the identical (or better) condition than when they originally inspected the property – i.e., during the Inspection Period. And yes, “vacant” land can have numerous issues – all the more reason to NEVER sell a piece of property without a survey. At a bare minimum, at least make sure you personally walk the property looking for problems. If your clients decide they don’t want to pay for the survey, in my opinion, it would be in your best interest to pay for it yourself. At the VERY LEAST, have them sign a Survey/Staking Waiver holding you and your company harmless - if they absolutely refuse a Survey or Staking. Some agents act like the “see no evil/hear no evil” monkeys. “If you find something, it could kill the deal!” they say. Yes, it could – but isn’t it better to lose a transaction than have your clients end up with a nightmare that YOU could have avoided for them? How much more will they rely on your judgment when you point out the issues that make a particular piece of property one to avoid – and find one that is right for them without the problems. Not to mention avoiding a potential lawsuit for yourself and your company. Maybe the mechanic who lives next door to the vacant lot has been dumping his used oil from his oil changing business there for the last twenty years? Maybe there are leaky underground tanks that were used to store gasoline for farm vehicles. Suddenly that “vacant lot” with no problems is a Hazardous Materials site! You may find rock walls that were built partly on the neighbor’s property. Here in Hawaii, there may be an old lava tube filled with several years’ worth of rubbish that will need to be cleaned out and hauled away. There could be a heiau (an ancient Hawaiian temple), possibly with human remains and archeological artifacts hidden by the foliage. If your client’s new property is declared to be an archeological site, they may find that they own a very expensive piece of land, and not be able to build on it – but they’re still responsible for paying the property taxes! Maybe there are native plants on the property that are being gathered regularly by Hawaiians – who may be allowed to do so under the PASH provisions (native gathering rights). Will your clients be comfortable with strangers coming onto their property whenever they want? If so, fine. If not, they will want to know about this provision. Your Buyer client may close escrow to find their new “vacant” property loaded with trash, junk cars, old refrigerators, washers, dryers, etc. upon closing if these paragraphs are not in the contract and enforced. They will then call YOU, their agent to take care of this problem for them. How do you think the agent on the other side of the transaction will respond when you politely ask them to have the Seller client clean up the mess - after they’ve already spent their commission check, and their client has moved on? You don’t want to put yourself, your clients, your company or your Broker in that situation. I hope you’ve found this information helpful! Until next time – Take Good Care! Jay J. Spadinger, REALTOR, BIC, ABR Hawaii State Educator Rainbow Properties Akahi Real Estate Network, LLC www.rainbowproperties.com www.jayhawaii.com |
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