| Government Affairs |
Why Proper Disclosure is Vital to Protect Your Liability
SAMCAR members (as with countless other REALTORS® throughout the state and nation) have a myriad of disclosures that may need to accompany a transaction. In San Mateo County, for example, there is a special disclosure on sewer lateral maintenance and responsibilities in Belmont (this in-lieu of a Point-of-Sale inspection). Disclosures (including mandated ones such as smoke detector operation) provide liability protection for REALTORS®.
The Consumer Financial Protection Bureau (CFPB) recently announced a consent agreement and $500,000 fine to a real estate firm for inadequate disclosure language in an affiliated business disclosure. This is a timely reminder why proper disclosure is vital to protecting your liability.
More importantly, this is the first of many enforcement actions expected from CFPB under the Real Estate Settlement Procedures Act (or RESPA). RESPA prohibits anyone from receiving a thing of value for the referral of settlement services in most residential transactions and requires disclosures of affiliate business arrangements. For more info on RESPA visit www.realtor.org/respa.
