SUMMARY--Makes various changes to provisions governing disclosures required upon sale of residential property. (BDR 10-552)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State or on Industrial Insurance: No.
EXPLANATION - Matter in italics is new; matter in brackets [ ] is material to be omitted.
AN ACT relating to sales of residential property; making various changes to provisions governing the disclosures required upon the sale of such property; and providing other matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
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Section 1 NRS 113.130 is hereby amended to read as follows:
113.130 1. Except as otherwise provided in subsections 2 and 3:
(a) At least 10 days before residential property is conveyed to a purchaser:
(1) The seller shall complete a disclosure form regarding the residential property; and
(2) The seller or his agent shall serve the purchaser or his agent with the completed disclosure form.
(b) If, after service of the completed disclosure form but before conveyance of the property to the purchaser, a seller or his agent discovers a new defect in the residential property that was not identified on the completed disclosure form or discovers that a defect identified on the completed disclosure form has become worse than was indicated on the form, the seller or his agent shall inform the purchaser or his agent of that fact, in writing, as soon as practicable after the discovery of that fact but in no event later than the conveyance of the property to the purchaser. If the seller does not agree to repair or replace the defect, the purchaser may:
(1) Rescind the agreement to purchase the property; or
(2) Close escrow and accept the property with the defect as revealed by the seller or his agent without further recourse.
2. Subsection 1 does not apply to a sale or intended sale of residential property:
(a) By a government or governmental agency.
(b) Pursuant to a court order or by foreclosure or deed in lieu of foreclosure.
(c) Between any co-owners of the property, spouses or persons related within the third degree of consanguinity.
(d) Which is the first sale of a residence that was constructed by a licensed contractor and not occupied by the purchaser for more than 120 days.
(e) By any bank, thrift company, credit union, trust company, savings and loan association or mortgage or farm loan association, licensed as such under the laws of this state or of the United States, if it has acquired the property for development, for the convenient transaction of its business, or as a result of foreclosure of the property encumbered in good faith as security for a loan or other obligation it has originated or holds.
(f) By a person who takes temporary possession or control of or title to the property solely to facilitate the sale of the property on behalf of a person who relocates to another county, state or country before title to the property is transferred to a purchaser.
3. A purchaser of residential property may waive any of the requirements of subsection 1. Any such waiver is effective only if it is made in a written document that is signed by the purchaser and notarized.
Sec. 2. NRS 113.150 is hereby amended to read as follows:
113.150 1. If a seller or his agent fails to serve a completed disclosure form in accordance with the requirements of NRS 113.130, the purchaser may, at any time before the conveyance of the property to the purchaser, rescind the agreement to purchase the property without any penalties.
2. If, before the conveyance of the property to the purchaser, a seller or his agent informs the purchaser or his agent, through the disclosure form or another written notice, of a defect in the property [that was not identified] of which the cost of repair or replacement was not limited by provisions in the agreement to purchase the property, the purchaser may:
(a) Rescind the agreement to purchase the property at any time before the conveyance of the property to the purchaser; or
(b) [Recover from the seller the actual amount necessary to repair or replace the defective part of the property.] Close escrow and accept the property with the defect as revealed by the seller or his agent without further recourse.
3. Rescission of an agreement pursuant to subsection 2 is effective only if made in writing, notarized and served not later than 4 working days after the date on which the purchaser is informed of the defect:
(a) On the holder of any escrow opened for the conveyance; or
(b) If an escrow has not been opened for the conveyance, on the seller or his agent.
4. Except as otherwise provided in subsection 5, if a seller conveys residential property to a purchaser without complying with the requirements of NRS 113.130 or otherwise providing the purchaser or his agent with written notice of all defects in the property of which the seller is aware, and there is a defect in the property of which the seller was aware before the property was conveyed to the purchaser and of which the cost of repair or replacement was not [identified] limited by provisions in the agreement to purchase the property, the purchaser is entitled to recover from the seller treble the amount necessary to repair or replace the defective part of the property, together with court costs and reasonable attorney's fees. An action to enforce the provisions of this subsection must be commenced not later than 1 year after the purchaser discovers or reasonably should have discovered the defect or 2 years after the conveyance of the property to the purchaser, whichever occurs later.
5. A purchaser may not recover damages from a seller pursuant to subsection 4 on the basis of an error or omission in the disclosure form that was caused by the seller's reliance upon information provided to the seller by:
(a) An officer or employee of this state or any political subdivision of this state in the ordinary course of his duties; or
(b) A contractor, engineer, land surveyor or pesticide applicator, who was authorized to practice that profession in this state at the time the information was provided.
6. A purchaser of residential property may waive any of his rights under this section. Any such waiver is effective only if it is made in a written document that is signed by the purchaser and notarized.