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20 such a claim on its merits."204 According to the court, any deposit or other funds paid toward the purchase the Air Force had acted essentially in a private capacity of the property. After a transfer of property a buyer the same as any other major landholder may have may elect either to rescind the transaction because of acted "to persuade the county body to accept its posi- the seller's nondisclosure or to retain the property. In tion."205 The court also pointed out that there was no either instance, a buyer may sue to recover his or physical invasion or damage to the claimant's property her actual damages. As permitted by other residen- by the Air Force, which could be held responsible for a tial real property disclosure laws, attorney's fees and taking "only when its own regulatory activity is so ex- costs are recoverable. The TAP does not preempt any tensive or intrusive as to amount to a taking...."206 other laws or remedies that a buyer may have under state law. As with several other disclosure laws, the VI. TYPICAL AIRPORT FAIR DISCLOSURE ACT TAP has a 1-year statute of limitations. PROVISIONS B. Typical Airport Fair Disclosure Act Provisions A. Introduction B.1. Statement of Purpose The Typical Airport Fair Disclosure Act Provisions The purpose of the Typical Airport Fair Disclosure (TAP) set forth in Part B begin with a statement of Act (Act) is to provide prospective purchasers of resi- purpose and a section defining important terms in the dential real property with notice of the location of any TAP. Consistent with other disclosure laws, the TAP airport, as defined in section 2, that affects residential applies to residential property with one to four dwell- real property offered for sale or otherwise transferred ing units and property subdivided for residential devel- unless a transfer is exempt under Section 3. opment. However, the TAP could be drawn to apply to all real property, including commercial real estate. The Comment proposed TAP exempts some transfers of property from disclosure requirements, such as transfers neces- The Act is intended to provide prospective buyers sitated because of a probate proceeding or foreclosure or of homes or of parcels intended for residential devel- because of inter-spousal transfers. opment with sufficient information to enable them to The TAP prescribes the form of the disclosure state- make informed decisions about their purchase with ment and when it must be provided to a buyer, but respect to noise and other effects of an airport affecting unlike most disclosure laws it requires that a real estate the property. The Act should diminish as well the risk sales contract must incorporate the disclosure state- of litigation by facilitating meaningful communication ment. Unlike some states' disclosure laws, the TAP does between a seller and a prospective buyer regarding the not provide a seller with the option of giving a buyer a presence of an airport in close proximity to the prop- report by a third party in lieu of a disclosure statement; erty offered for sale.207 if such an approach is allowed, then the real estate con- tract would need to incorporate the report so that it is B.2. Definitions binding on the parties. Under the TAP a seller is not (a) The term Air Installation Compatible Use Zone responsible to a buyer for a later expansion or change in means any military air installation affecting land in its an airport's operations that affects or would affect the vicinity as shown on a map that plots contours for mili- property. tary aircraft noise and compatible land uses based on Unlike other disclosure laws, the TAP requires that a study conducted in accordance with 32 C.F.R. an airport disclosure statement be made part of the § 256.1, et. seq.208 deed, either by including an airport disclosure state- (b) The term airport means an area of land or other ment and notification in the deed itself or by making hard surface, excluding water, that is used or intended the disclosure statement a part of and recorded with to be used for the landing and takeoff of aircraft, in- the deed. The TAP's intent is that after an airport dis- cluding any buildings and facilities,209 and includes an closure is made, it becomes part of the title to the prop- airport area as defined or described in Sections 2(a), erty so as to be binding on future purchasers by giving 2(e), 2(i), 2(o), and 4(b) of this Act. them notice of an airport affecting their property. (c) The term airport authority means the state or As for the buyer's remedies, as is true of existing any political subdivision thereof or any corporation, disclosure laws, the TAP permits a buyer to withdraw entity, or other organization created by law for the es- an offer or rescind a contract prior to a transfer of tablishment, operation, or control of an airport. title. Unlike other disclosure laws, the TAP allows a (d) The term Airport Disclosure Statement means a buyer to exercise his or her right of withdrawal or re- written statement that identifies an airport as defined scission at any time prior to settlement and to recover 207 Giametti v. Inspections, Inc., 76 Conn. App. 352, 360, 204 Id., 213 Ct. Cl. at 36465, 552 F.2d at 339. 824 A.2d 1, 7 (2003). 205 Id., 213 Ct. Cl. 362, 552 F.2d at 33940. 208 32 C.F.R. §§ 256.3(a), (d)(2)(i), 256.4(b)(ii), and 206 Id., 213 Ct. Cl. at 365, 552 F.2d at 339. 256.5(a)(1) (2010); HAW. REV. STAT. § 508D-15(3) (2010). 209 14 C.F.R. § 139.5 (2010).
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21 in Sections 2 and 4 and is delivered by a seller or a 5) an exercise of an option to purchase residen- seller's broker or agent to a buyer or a buyer's broker or tial real property.217 agent as required by Sections 4, 5, and 6 of this Act.210 (l) The term residential real property means: (e) The term Airport Influence Area means all prop- (1) any land in this state to which is affixed not erty in the vicinity of an airport that is exposed to air- less than one or more than four dwelling units;218 craft noise and overflight and that has a day-night av- (2) any estate or interest in an unimproved erage sound level of sixty-five decibels or higher as housing lot or lots to be improved by not less than one determined by the responsible airport or airport author- or more than four dwelling units; and ity and shown on a map recorded in each county having (3) any land or tract of land that is divided property within the Airport Influence Area.211 or proposed to be divided over any period into one or (f) The term buyer means an individual or trustee more lots, parcels, units, or interests, which are offered, or a corporation, partnership or any other entity, ei- known, designated or advertised as a common unit by a ther directly or indirectly through a broker or agent, common name or as part of a common promotional plan who is attempting to acquire or is acquiring legal or of advertising and sale.219 equitable title or a possessory interest in residential (m) The term sale means an acquisition of residen- real property and includes a transferee as defined in tial real property whether by purchase, at an auction, Section 2(r).212 an exchange, an installment contract, a lease with (g) The term dwelling unit means any building, an option to purchase, an exercise of an option, or structure, or portion thereof which is occupied or that any other method by which residential real property is designed or intended to be occupied as a residence by together with any improvements is sold and includes a one or more persons.213 transfer as defined in Section 2(p) of this Act.220 (h) The term final settlement means when a seller (n) The term seller means an individual or a trustee delivers a deed of conveyance to a buyer or transferee or a corporation, partnership, or other entity having of residential real property.214 legal or equitable title who is attempting to sell or (i) The term Noise Exposure Map means a map transfer or is selling or transferring residential real submitted by or on behalf of an airport to the Federal property either directly or indirectly through a broker Aviation Administration in accordance with its Regula- or an agent and includes a transferor as defined in Sec- tions appearing at 14 C.F.R. Part 150, Airport Noise tion 2(s). Compatibility Planning or any successor regulation.215 (o) The term traffic pattern means the traffic flow (j) The term offer to purchase means a buyer's writ- that is prescribed for aircraft landing at, taxiing on, or ten offer to purchase residential real property in any taking off from, an airfield and includes the actual ra- form including but not limited to a real estate con- dar flight paths used by landing and departing air- tract signed by a buyer and presented for a seller's craft.221 acceptance, a lease with an option to purchase, the exercise of an option to purchase, or an offer to ex- change property for residential real property.216 (k) The term real estate contract means any of the 217 following: ME. REV. STAT. ANN. tit. 33, § 171(5) (2010); N.Y. REAL (1) an executed agreement for the purchase and PROP. LAW § 461(4) (2010). 218 sale of residential real property; ALASKA STAT. § 34.70.200 (2010); DEL. CODE ANN. tit. 6, (2) an executed lease with an option to pur- § 2571(4) (2010); HAW. REV. STAT. § 508D-1 (2010); 765 ILL. chase residential real property; COMP. STAT. 77/5 (2010); ME. REV. STAT. ANN. tit. 33, § 171(6) (2010); MD. CODE § 10-702(b)(1) (2010); MICH. COMP. LAWS (3) an executed lease-with-obligation-to- § 565.952, § 2 (2010); MINN. STAT. § 513.52, Subd. 4; MISS. purchase agreement for residential real property; CODE ANN. § 89-501(1) (2010); NEB. REV. STAT. § 76-2,120(1)(c) (4) an executed installment land sale contract (2010); NEV. REV. STAT. §§ 113.100(3) and (4) (2010); N.C. GEN. for residential real property; or STAT. § 47E-1 (2010); OKLA. STAT. § 60-832(8) (2010); PA. CONS. STAT. tit. 68, § 7302 (2010) (statute applicable to all real estate transfers with some exceptions); S.D. CODIFIED LAWS 210 ANN. § 43-4-37 (2010); TENN. CODE ANN. § 66-5-201 (2010); VA. HAW. REV. STAT. § 508D-1 (2010). 211 CODE ANN. § 55-517 (Michie 2010); WASH. REV. CODE ARIZ. REV. STAT. ANN. §§ 28-8485(A) and (B) (2010). § 64.06.005 (2010). 212 DEL. CODE ANN. tit. 6, § 2571(2) (2010); ME. REV. STAT. 219 DEL. CODE ANN. tit. 6, § 2571(5) (2010); ME. REV. STAT. tit. 33, § 171(4) (2010); MINN. STAT. § 513.52, Subd. 2 (2010); ANN. tit. 33, § 171(2) (2010); MINN. STAT. § 513.52, Subd. 5 OKLA. STAT. § 60-832(3) (2010); S.D. CODIFIED LAWS ANN. (2010); NEB. REV. STAT. § 76-2,120(d) (2010); NEV. REV. STAT. § 43-4-37 (2010). §§ 113.070(4) and 113.100(5) (2010). 213 NEV. REV. STAT. § 113.100(3) (2010). 220 ALASKA STAT. § 34.70.200(4) (2010); HAW. REV. STAT. 214 DEL. CODE ANN. tit. 6, § 2571(3) (2010); NEV. REV. STAT. § 508 D-1 (2010); IOWA CODE § 558A.1(4) (2010); MINN. STAT. § 113.100(1) (2010). § 513.52, Subd. 4 (2010); MINN. STAT. § 513.93 (2010). 215 14 C.F.R. pt. 150 (2010); HAW. REV. STAT. § 508D-15(2) 221 Aviation Dictionary, available at http://aviation. (2010). aviationdictionary.org/VFA-13-Aviation- 216 OKLA. STAT. § 60-832 (2010). Dictionary/traffic_pattern, last accessed on May 5, 2011.
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22 (p) The term transfer means any form of transfer of related noise, overflight, safety, or airspace protection title to residential real property by a seller or trans- factors may significantly affect land uses or necessi- feror to a buyer or transferee.222 tate restrictions on those uses as determined by an air- (q) The term transfer of title means the delivery of a port land use commission."231 properly executed deed of conveyance to real property to Section 2(i) defines an airport noise exposure map, a buyer or transferee.223 which some airports have submitted voluntarily to the (r) The term transferee means anyone acquiring title FAA pursuant to its regulations appearing at 14 C.F.R. to residential real property pursuant to an instrument Part 150. As of January 2011, as required by the Vi- that includes the power to transfer an estate or interest sion 100Century of the Aviation Reauthorization in real property.224 Act, Public Law 108-176, the FAA makes available to (s) The term transferor means a person who is the public on the FAA's Web site noise exposure maps transferring title to residential real property to a and other information on public airports that have buyer or transferee.225 submitted a noise exposure map under Part 150.232 Section 2(l) defines the term residential real prop- Comment erty. Current residential real property disclosure laws typically apply to real property consisting of not less Section 2(a) concerns a military airport or air instal- than one or more than four dwelling units. Although lation for which one of the military branches has con- the Act applies to sales of residential real property, the ducted a study and mapped an air installation compati- Act also applies to lots that are intended to be improved ble use zone, or AICUZ, that must be disclosed by a with a dwelling, as well as to property that may be seller. As for other alternatives, Arizona requires subdivided, advertised, and sold to the public for resi- that a seller provide a proper and timely notice when dential use. Presently, most residential real property a property is in a High Noise and Accident Potential disclosure laws are concerned with defects in a dwell- Zone.226 A seller must disclose that the property is ing unit and thus are inapplicable to unimproved land. located within the zone and is subject to a require- Section 2(l) is consistent with current disclosure laws, ment of compatibility with a military airport, as well as which do not apply to commercial real property. How- disclose to a buyer that there is a potential for aircraft ever, the Act could be expanded to apply to all trans- noise.227 fers of real property, including agricultural, commer- In Maryland, sellers of residential real property cial, and undeveloped property, because of the must disclose to buyers known military operations possibility of a change in land use affecting property in affecting a property, including flight operations and the vicinity of an airport. the testing of munitions that may subject the property As for Sections 2(p), 2(r), and 2(s), not all resi- to high noise levels.228 dential real property transactions are necessarily in In Virginia, an the form of a real estate contract. Thus, the use of the owner of residential real property located in any locality terms transfer, transferee, and transferor is intended in which a military air installation is located shall dis- to embrace more transactions involving transfers of close to the purchaser whether the subject parcel is lo- property subject to the Act. However, certain transfers cated in a noise zone or accident potential zone, or both, if are exempt under Section 3. so designated on the official zoning map by the locality in which the property is located on a form provided by the B.3. Exempt Transfers Real Estate Board.229 This Act shall not apply to the following transfers of residential real property:233 Furthermore, an owner must disclose "the specific noise zone or accident potential zone, or both, in which the property is located according to the official zoning 231 CAL. CIV. CODE § 1353 (2010). map."230 232 See Airport Noise and Land Use Information, including Section 2(e) defines an airport influence area. As for Noise Exposure Maps, available at http://www.faa.gov/ other alternatives, California defines an airport influ- airports/environmental/airport_noise/noise_exposure_maps/, ence area as one "in which current or future airport- last accessed on May 26, 2011. As the FAA advises, the noise exposure maps and land use information developed pursuant to 222 Pt. 150 are voluntarily prepared by airport sponsors, and not OKLA. STAT. § 60-832(5) (2010); S.D. CODIFIED LAWS all airport sponsors have prepared them. ANN. § 43-4-37(5) (2010). 233 223 CAL. CIV. CODE § 1102.2(b) (West 2010); CONN. GEN. N.Y. REAL PROP. LAW § 430(6) (2010). 224 STAT. § 20-327b(b) (2010); DEL. CODE ANN. tit. 6, §§ 2577(1)-(9) IOWA CODE § 558A.1(5) (2010). (2010); HAW. REV. STAT. §§ 508D-3(1)-(8) (2010); IOWA CODE 225 HAW. REV. STAT. § 558A.1(6) (2010). §§ 558A.1(4) (a)-(h) (2010); ME. REV. STAT. tit. 33, §§ 172(1)- 226 ARIZ. REV. STAT. ANN. § 28-8484(E) (2010). (12) (2010); MD. CODE ANN., REAL PROP. §§ 10-702(b)(i)(2)(ii- 227 Id. §§ 28-8461(20) and 28-8484 (2010). vii) (2010); MICH. COMP. LAWS §§ 565.953, § 3(a)-(i) (2010); 228 MISS. CODE ANN. § 89-1-501(2)(g) (2010); NEB. REV. STAT. §§ Id. 229 76-2,120(6)(a)-(l) (2010); NEV. REV. STAT. §§ 113.115(3)(a)-(d) VA. CODE ANN. § 55-519.1 (Michie 2010). (2010); N.Y. REAL PROP. LAW §§ 463(1)-(14) (2010); N.C. GEN. 230 Id. STAT. §§ 47E-2(1)-(11) (2010); OHIO REV. CODE ANN.
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23 (a) Transfers pursuant to court order such as trans- warranty, there appears to be no reason for an airport fers ordered by a court in the administration of an es- disclosure act to exempt a first sale of previously unoc- tate, trust or guardianship or pursuant to a writ of exe- cupied or uninhabited property. cution, by eminent domain, and transfers resulting from a decree for specific performance. B.4. Seller's Duty to Disclose an Airport (b) Transfers to a mortgagee by a mortgagor in de- (a) When residential real property is offered for sale fault by a deed in lieu of foreclosure. or otherwise transferred, a seller or other transferor (c) Transfers by any sheriff's sale for default on shall disclose to a buyer whether the property is located an obligation secured by a mortgage, judgment, tax or within the boundaries: other lien. (1) of an airport Noise Exposure Map or an (d) Transfers by a fiduciary in the course of the ad- Airport Influence Area or ministration of a decedent's estate, guardianship or (2) of a military Air Installation Compatible trust. Use Zone. (e) Transfers from one co-owner to one or more other (b) If neither Section 4(a) (1) or (2) applies, then a co-owners. seller must disclose whether the residential real prop- (f) Transfers made to a spouse or to a person or per- erty is within 2 miles of an airport and its traffic sons in the lineal line of consanguinity of one or more of pattern, as defined in Sections 2(b) and 2(o), including the transferors. the runways and landing and departure flight paths as (g) Transfers between spouses resulting from a prop- shown on a map published by the Federal Aviation erty settlement incident to a divorce. Administration or the airport or airport authority, as (h) Transfers to any government entity.234 well as actual radar flight paths used by landing and departing aircraft.237 Comment Comment Section 3 reflects the approach in many states to ex- empt specific types of transfers from residential real With respect to Section 4(a), there will not be a noise estate disclosure laws. The California disclosure law exposure map that has been submitted to the FAA has an even more extensive list of exempt transfers.235 (submission is voluntary) or a map of a designated Some residential real property disclosure laws ex- airport influence area for all airports within the vicin- empt the first sale of residential property that has ity of property subject to the Act. Consequently, S ec- never been occupied or inhabited.236 Although such an tion 4(b) is intended to embrace an airport for which exemption may be justified regarding defective mate- there is no noise exposure map, designated airport in- rial or workmanship in a house that may be under fluence area, or AICUZ. For example, in Indiana, a seller must disclose the existence of an airport that is §§ 5302.30(B)(2)(a)-(n) (2010); OKLA. STAT. § 60-838(A)(1) located within a certain geographical distance from the (2010); R.I. GEN. LAWS §§ 5-20.8-3(1)-(10) (2010); S.C. CODE seller's property as determined by the state real estate ANN. §§ 27-50-30(1)-(15) (2010); S.D. CODIFIED LAWS ANN. commission.238 The real estate commission may con- §§ 43-4-43(1)-(6) (2010); TENN. CODE ANN. §§ 66-5-209(1)-(12) sider the differences between an airport serving com- (2010); VA. CODE ANN. §§ 55-518(1)-(9) (Michie 2010); WASH. mercial airlines and an airport that does not serve REV. CODE §§ 64.06.010(1)-(7) (2010); WIS. STAT. §§ commercial airlines in deciding the distance to be dis- 709.01(2)(a)-(d) (2010). closed.239 234 Subsection (h) does not include transfers from any gov- ernment entity. Although land acquired under Pt. 150 is not to B.5. Airport Disclosure Statement be resold for residential use, sales have been permitted on rare (a) An Airport Disclosure Statement occasions. Subsection (h) is drafted to avoid exempting an air- port from providing a disclosure statement when it disposes of (1) shall identify the property being offered for residential property acquired under Pt. 150. sale or otherwise being transferred by its legal de- 235 CAL. CIV. CODE § 1102.2(b) (West 2010). scription (as shown in the land or tax records for 236 the property) and its street address; ALASKA STAT. § 34.70.120 (2010); CONN. GEN. STAT. § 20-3276(b)(4) (2010); HAW. REV. STAT. § 508D-3(6) (2010); (2) shall state whether the property is within IDAHO CODE § 55-2505(12) (2010); 765 ILL. COMP. STAT. 77/15 the boundaries of an airport Noise Exposure Map or (9) (2010); IND. CODE ANN. § 32-21-5-1(b)(8) (Burns 2010); KY. Airport Influence Area or a military Air Installation REV. STAT. § 324.360(7) (2010); MD. CODE ANN., REAL PROP. Compatible Use Zone; and § 10-702(b)(2)(i)(1) (2010); MINN. STAT. § 513.54(10) (2010); (3) if Section 5(a)(2) does not apply, shall state NEB. REV. STAT. § 76-2,120(6)(k) (2010); N.Y. REAL PROP. LAW whether the property is within 2 miles of an airport § 463(12) (2010); N.C. GEN. STAT. § 47E-2(9) (2010); OHIO REV. and its traffic pattern as described in Section 4(b) of CODE ANN. § 5302.30(B)(2)(l) (2010); OKLA. STAT. § 60-838(9) this Act. (2010); R.I. GEN. LAWS § 5-20.8-3(8) (2010); S.C. CODE ANN. § 27-50-30(10) (2010); S.D. CODIFIED LAWS ANN. § 43-44-43(6) 237 (2010); TENN. CODE ANN. § 66-5-209(9) (2010) (exempting first HAW. REV. STAT. §§ 508D-15 and 508D-15(a)(2) (2010). 238 sale "provided the builder offers a written warranty"); VA. IND. CODE ANN. § 32-21-5-7(4) (Burns 2010). 239 CODE ANN. § 55-518(9) (Michie 2010). Id.
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24 (b) A seller shall be deemed to be in compliance with requirements set forth therein and in Section 6 of this this Act when the seller discloses an airport by using Act: the following form and thereafter performing the Airport Disclosure Statement Pursuant to the Airport Fair Disclosure Act (Act) enacted by this State, [citation], which defines the terms used in this Statement, and , (Seller), the owner of residential real property as defined in the Act, situated in the City/County of known as [Legal Description, such as Subdivision, Block, Square, Lot] located at [Street Address], (Property), hereby discloses to and , (Buyer), that the aforesaid Property is affected by an airport as described below in that the Property is located within the boundaries of: [COMPLETE ENTRIES THAT APPLY TO THE PROPERTY] a Noise Exposure Map for the [Name of Airport] submitted by the [Name of Airport or Airport Authority] to the Federal Aviation Administration; an Airport Influence Area for the [Name of Airport] designated by the [Name of Airport or Airport Authority]; a military Air Installation Compatible Use Zone, which is also known as the [Name of Military Airport or Air Installation]; or the property is located within 2 miles of an airport known as the [Name of Airport] and its traffic pattern as defined in the Act, including the runways and landing and departure flight paths as shown on a map published by the Federal Aviation Administration or by the [Name of Airport or Airport Authority], as well as the ac- tual radar flights paths used by landing and departing aircraft. This Airport Disclosure Statement shall be attached to and made a part of any real estate contract between the Seller and the Buyer and shall survive the delivery of a deed of conveyance by the Seller to the Buyer at final settle- ment. Pursuant to the Section 6(d) of the Act, (1) the Seller's (or other Transferor's) Airport Disclosure Statement shall be incorporated by reference in the Deed and recorded with the Deed in the land records of the [City/County] in which the aforesaid Property is situated, or (2) the Seller's (or other Transferor's) Deed shall include the Notification prescribed by Section 6(d)(2) of the Act prior to its recording in the aforesaid land records. The Buyer is hereby notified that, prior to signing a real estate contract for the purchase of the aforesaid Property, the Buyer should conduct any investigation that the Buyer deems prudent and necessary to assess the impact, if any, of the airport, including but not limited to airport-related noise, that may affect the Buyer's use and enjoyment of the Property. Date Seller Seller I (We) acknowledge receipt of the foregoing Airport Disclosure Statement: Date Buyer Buyer Comment California's form entitled Notice of Airport in Vicin- ity.240 Although several states' disclosure laws prescribe the form for the disclosure of defects and conditions either in the statute or as required by a real estate commission or equivalent body, Section 5 is based on 240 CAL. CIV. CODE § 1353(a)(1) (West 2010).
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25 B.6. Timing and Delivery of Airport Disclosure aircraft. The property being conveyed may be affected Statement by airport operations including but not limited to (a) A seller or a seller's broker or agent shall deliver noise, vibration, smoke, odor, and/or traffic. an Airport Disclosure Statement at the time residential This Notification is binding on the grantee and all real property is being offered for sale and/or listed with future grantees and all other transferees of the herein a broker or agent for sale and not later than when a described real property. buyer makes an offer to purchase the property.241 (b) The Airport Disclosure Statement shall be in- Comment cluded within the real estate contract or shall be in- corporated by reference in the contract and made an Section 6(a) requires the disclosure of an airport af- addendum to the contract.242 fecting the property as soon as the property is offered (c) The real estate contract shall state that the Air- or listed for sale and no later than when a buyer makes port Disclosure Statement survives the delivery of the an offer. In contrast, some residential real property deed of conveyance to the property. disclosure laws permit disclosure to be made even (d) A Seller's deed of conveyance after a real estate contract has been executed by a (1) shall incorporate an Airport Disclosure State- buyer and seller. The intent of Section 6(a) is to pro- ment that shall be recorded as an addendum to the vide for early disclosure so as to avoid any dispute later deed or regarding the transaction because of a seller's failure to (2) shall include the following statement and no- make a required airport disclosure. Section 6(a) is tification: consistent with disclosure laws in some states that authorize a seller's broker or agent to deliver a required Airport Disclosure Statement and Notification disclosure statement.243 Section 6(b) differs from most residential real prop- This Notification is required by the Airport Fair erty disclosure laws. Virtually all of the current disclo- Disclosure Act, [citation] enacted by the State of sure laws do not require that a property disclosure . statement be made a part of the real estate contract.244 The property being conveyed hereby is within the The intent of Section 6(b) is that rather than a dis- boundaries of an airport Noise Exposure Map for the closure statement being merely informative, the state- [Name of Airport], an Airport Influence Area for the ment will continue to be binding both on a seller and a [Name of Airport] designated by the [Name of Airport buyer. Local real estate practice may vary; however, or Airport Authority], and/or a military Air Installation in many if not most jurisdictions a prospective Compatible Use Zone for the [Name of Military Airport buyer's offer to purchase real property is often in the or Air Installation], or is within 2 miles of the [Name of form of a real estate contract signed by the buyer that Airport] or its traffic pattern, including the runways is presented to the seller for the seller's acceptance. If and landing and departure flight paths as shown on a so, a real estate contract may include an airport disclo- map published by the Federal Aviation Administration sure clause to be completed by a seller or a seller's or the [Name of Airport or Airport Authority] and the agent or broker prior to a buyer's offer. Alternatively, actual radar flight paths used by landing and departing an addendum may be completed by a seller that is pro- vided to a buyer for attachment to the buyer's offer to purchase. In either instance, the disclosure must com- 241 Id. §§ 1102.3 and 1102.12 (authorizing delivery by a real ply with Sections 4, 5, and 6. estate agent); CONN. GEN. STAT. § 20-327b(a) (2010); HAW. The intent of Section 6(c) is to avoid unambiguously REV. STAT. § 508D-4(2) (2010); IDAHO CODE § 55-2509 (2010); the merger-by-deed doctrine whereby a deed of con- MISS. CODE ANN. § 89-1-503 (2010); NEB. REV. STAT. § 76- veyance to real property supersedes either in whole 2,120(7) (2010); NEV. REV. STAT. § 113.070(2) (2010) (stating or in part the real estate contract. It does not appear that "[t]he seller shall retain a copy of the disclosure document that any of the present residential real property disclo- which has been signed by the initial purchaser acknowledging the date of receipt by the initial purchaser of the original sure laws provide that the real estate contract sur- document"); OHIO REV. CODE ANN. § 5302.30(I) (2010); OKLA. vives the deed. In Biddle v. BAA Indianapolis, LLC,245 STAT. § 60-834(D) (2010); R.I. GEN. LAWS §§ 5-20.8-2(a) and 5- because the effect of airport noise on the property pur- 20.8-5(a) (2010) ("Every agreement for the purchase and sale of chased by the buyers had been disclosed to the buyers residential real estate located in the state shall contain an acknowledgement that a completed real estate disclosure form 243 has been provided to the buyer by the seller."). See, e.g., ME. REV. STAT. ANN. tit. 33, § 176(1) (West 242 DEL. CODE ANN. tit. 6, § 2573 (2010) (providing also that 2010) (stating that information in the disclosure statement is the disclosure form signed by the buyer and seller must "be- for disclosure only and not intended to be part of the contract come a part of the purchase agreement"); N.Y. REAL PROP. LAW between the purchaser and seller). 244 § 462 (2010) (stating that "[a] copy of the property condition But see DEL. CODE ANN. tit. 6, § 2573 (2010) (providing disclosure statement containing the signatures of both seller also that the disclosure form signed by the buyer and seller and buyer shall be attached to the real estate purchase con- must "become a part of the purchase agreement"). 245 tract"). 860 N.E.2d 570 (Ind. 2007).
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26 both in the real estate contract and in the deed to B.8. Buyer's Right to Withdraw an Offer or Rescind a the property, the court affirmed a trial court's dis- Contract248 missal of the buyers' later inverse condemnation claim (a) If an Airport Disclosure Statement is not deliv- against the Indianapolis Airport Authority for an al- ered to a buyer or is not delivered to a buyer until af- leged taking based on airport noise. ter a buyer makes an offer to purchase, the buyer Pursuant to Section 6(d), if an Airport Disclosure may withdraw an offer to purchase or rescind any Statement is referenced in, attached to, and recorded resulting real estate contract at any time between the with the deed, or if the deed includes the prescribed date of the offer to purchase or the resulting real estate Airport Disclosure Statement and Notification, all sub- contract and the final settlement on the property. sequent buyers and transferees will be on notice of an (b) A buyer may withdraw an offer to purchase or airport affecting the property. rescind a resulting real estate contract by notifying the seller or the seller's broker or agent: B.7. Buyer's Duty to Investigate (1) by delivering a letter in person to the seller On receipt of an Airport Disclosure Statement in or the seller's broker or agent; compliance with this Act, a buyer shall have a duty to (2) by mailing a letter to the seller or the investigate the current or future impact of an airport seller's broker or agent by certified mail, return receipt on the property that is the subject of the Airport Disclo- requested; or sure Statement. (3) by sending a letter by any other method, including a courier service or electronic mail or facsim- Comment ile, as long as there is a record showing the delivery of the letter to the seller or the seller's broker or agent. Section 7 is consistent with the disclosure laws in (c) If a buyer withdraws an offer to purchase or re- several states providing that a seller's compliance with scinds a real estate contract in accordance with this a residential real property disclosure law is not a sub- section, the withdrawal of the offer or the rescission of stitute for a buyer's inspection of the property or an the resulting real estate contract is without penalty to excuse for a buyer not to exercise reasonable the buyer and the seller or the seller's broker or agent care.246 For example, in Hawaii, "[t]he disclosure shall return to the buyer (or direct any third party to statement shall not be construed as a substitute for return to the buyer) within two business days the any expert inspection, professional advice, or warranty buyer's deposit and any other funds paid by the buyer that the buyer may wish to obtain."247 in advance of the final settlement for the purchase of The nature of an investigation would be in the the property. buyer's discretion, but could include a review of the land records in the county where the property is located, the Comment use of an appraiser, another expert, and/or the buyer's own reconnaissance of the area. The presence of an airport is a condition that may affect a buyer's use and enjoyment of property, as well as affect a resale of the property. Consequently, Section 8(a) is more favorable to buyers than most if not all of the current real property disclosure laws. Rather than limit a buyer to a few days to withdraw an offer or re- 246 367 DEL. CODE ANN. tit. 6, § 257 (2010); GA. CODE ANN. § scind a contract, Section 8(a) permits a buyer to do so 10-6A-5(b)(2) (2010); HAW. REV. STAT. § 508D-1(3) (2010); at any time prior to final settlement. Although a IDAHO CODE § 55-2507(4) (2010); NEV. REV. STAT. § 113.140(3) buyer should be able to withdraw an offer any time (2010) ("Neither this chapter nor chapter 645 of NRS relieves a prior to a seller's acceptance, it may be important to buyer or prospective buyer of the duty to exercise reasonable specify that a buyer has the right to withdraw an offer, care to protect himself."); OHIO REV. CODE ANN. § 5302.30(D)(1) (Baldwin 2010); OKLA. STAT. § 60-833(B)(2)(c) 248 (2010); R.I. GEN. LAWS § 5-20.8-2(b) (2010); S.C. CODE ANN. § ALASKA STAT. § 34.70.020 (2010); CAL. CIV. CODE 27-50-80 (2010). § 1102.3 (West 2010); HAW. REV. STAT. 508D-16(b) (2010) (re- 247 IDAHO STAT. § 55-2507(3) (2010); IND. CODE ANN. § 32- quiring return of all deposits); 765 ILL. COMP. STAT. 77/40 21-5-9 (Burns 2010); KY. REV. STAT. ANN. § 324.360(7) (2010); (2010) (providing for termination of the contract); LA. REV. LA. REV. STAT. ANN. § 3198(D)(1) (West 2010); MICH. COMP. STAT. §§ 9:3198(B)(2) and (3)(a) (2010); ME. REV. STAT. tit. 33, LAWS § 565.951, § 7(1) (2010); MISS. CODE ANN. § 89-1-509 § 174(2) (2010); NEV. REV. STAT. §§ 113.130(b)(1) and (2010); NEB. REV. STAT. §§ 76-2,121(3)(e), (f), and (g) (2010); 113.150(1) and (2) (2010); N.C. GEN. STAT. § 47E-5(b) (2010); NEV. REV. STAT. § 113.130 (2010) ("A completed disclosure form OHIO REV. CODE ANN. § 5302.30(K)(2) (2010); OR. STAT. does not constitute an express or implied warranty regarding § 105.475(1) (2010); R.I. GEN. LAWS §§ 5-20.8-4(a) and (b)(1) any condition of residential property."); OHIO REV. STAT. ANN. § and (2) (2010); S.D. CODIFIED LAWS ANN. §§ 43-4-38 and 43-4- 5302.30(D)(1) (2010); OKLA. STAT. § 60-832(10) (2010); OR. REV. 39 (2010); TENN. CODE ANN. § 66-5-203(b) (2010); VA. CODE STAT. § 105.464 (2010); R.I. GEN. LAWS § 5-20.8-2(b) (2010); ANN. § 55-520(B) (Michie 2010); WASH. REV. CODE §§ 64.06.030 S.D. CODIFIED LAWS ANN. § 43-4-44 (2010); TENN. CODE ANN. and 64.06.040(3) (2010). §§ 66-5-201 and 66-5-210 (2010); VA. CODE ANN. § 55-518(B) (Michie 2010); and WASH. REV. CODE § 64.06.015 (2010).
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27 such as one made at an auction or when a buyer has (b) In lieu of rescission under Section 9(a), a buyer made a firm offer. may elect to retain the property and commence an However, some states may want to limit the time action for actual damages directly and proximately within which a buyer may withdraw an offer or rescind. caused by the seller's failure to deliver an Airport Dis- For example, some disclosure laws limit a buyer's right closure Statement as required by this Act.254 to withdraw an offer or to rescind a contract to 7 2 (c) A buyer's right to claim damages for a seller's hours, excluding federal and state holidays and week- noncompliance with the Act is not affected by a buyer's ends, after delivery of the disclosure statement.249 Fur- sale or re-conveyance of the subject property within thermore, some states may want to provide that non- one-year of the final settlement on the residential real compliance with the Act does not invalidate a sale or property at issue. conveyance when a buyer does not exercise his or her (d) In any legal or equitable action by a buyer based rights pursuant to this Section.250 If so, the following on or arising out of a seller's non- compliance with the S ections (d) and (e) could be used in Section 8. Act, the buyer may recover attorney's fees and costs as (d) Any rights of a buyer to terminate a real estate determined by the court.255 contract provided by this section are waived conclusively (e) This section does not limit any other rights or if not exercised prior to final settlement or prior to occu- remedies a buyer may have under state law, whether pancy of the property, whichever is earlier, by the buyer. by statute or at common law. A buyer's right to rescind a real estate contract or a con- veyance of residential real property subject to this Act Comment for reasons other than a seller's non-compliance with the Act are not affected by this section.251 Section 9 provides a buyer with several remedies. Even if a buyer elects to rescind a transaction after (e) A transfer subject to this Act is not invalid or is to be conveyance, Section 9(a) permits a buyer to recover any invalidated solely because of the failure of the seller or actual damages sustained by a buyer that were directly the seller's broker or agent to comply with this Act.252 and proximately caused by a seller's noncompliance. The inclusion of subsections (d) and (e) would mean Section 9(b) permits a buyer to elect to retain the that a buyer would not be able to rescind a purchase property and sue to recover actual damages that were after a transfer of title. If subsections (d) and (e) are directly and proximately caused by a seller's noncom- included in Section 8, then Section 9 below will re- pliance. quire revision or deletion. However, Section 9(d) that The intent of Section 9(c) is to preserve a buyer's permits a buyer to claim actual damages directly and rights and remedies even though within 1 year of final proximately caused by a seller's noncompliance with settlement a buyer has sold or reconveyed the prop- the Act could be retained. B.9. Buyer's Right to Claim Damages COMP. STAT. 77/45 (2010); LA. REV. STAT. 9:3198B.(d) (2010); ME. REV. STAT. tit. 33, § 178 (2010); MINN. STAT. § 513.57, (a) If residential real property has been transferred Subd. 3 (2010) ("[n]othing in sections 513.52 to 513.60 pre- to a buyer prior to a seller's disclosure of an airport, as cludes liability for an action based on fraud, negligent misrep- defined in Section 2, the buyer may bring an action resentation, or other actions allowed by law"); OHIO REV. CODE within one year of the final settlement on the real ANN. §§ 5302.30(J) and (L) (2010); PA. CONS. STAT. tit. 68, property to rescind the purchase and the transfer of § 7313(a) (2010); TENN. CODE ANN. §§ 66-5-208(a)(1)(a)-(a)(3) title to the buyer and to recover any actual damages and (b) (2010); WASH. REV. CODE § 64.06.070 (2010). 254 directly and proximately caused by the seller's failure ALASKA STAT. § 34.70.090(b) (2010); HAW. REV. STAT. to disclose an airport as required by this Act.253 § 508D-16(c) (2010); IDAHO CODE § 55-2517 (2010); 765 ILL. COMP. STAT. 77/55 (2010); IOWA CODE § 558A.6 (2010); MINN. STAT. § 513.57, Subd. 2 (2010) ("recover damages and receive 249 LA. REV. STAT. § 9:3198(3)(a) (2010); ME. REV. STAT. tit. other equitable relief as determined by the court"); MISS. CODE 33, § 174(2) (2010). ANN. § 89-1-523 (2010) (providing that "any person who will- 250 372 CAL. CIV. CODE § 1102.13 (2010) provides: fully or negligently violates or fails to perform any duty pre- No transfer subject to this article shall be invalidated solely scribed by any provision of sections 89-1-501 through 89-1-523 because of the failure of any person to comply with any provision shall be liable in the amount of actual damages suffered by a of this article. However, any person who willfully or negligently transferee"); NEB. REV. STAT. § 76-2,120(12) (2010); N.Y. REAL violates or fails to perform any duty prescribed by any provision PROP. LAW § 465(2) (2010) (applying to a "willful failure"); of this article shall be liable in the amount of actual damages OKLA. STAT. § 60-837(B) (2010); PA. CONS. STAT. tit. 68, § suffered by a transferee. 7311(a) (2010); S.D. CODIFIED LAWS ANN. § 43-4-42 (2010); 251 LA. REV. STAT. § 3198(3)(b) (2010); ME. REV. STAT. tit. TENN. CODE ANN. § 66-5-208(a)(1) (2010) (for owner's misrep- 33, § 174(4) (2010); MD. CODE ANN., REAL PROP. § 10-702(k)(2) resentations on residential disclosure statement); VA. CODE (2010). ANN. § 55-524(B)(2) (Michie 2010). 252 255 LA. REV. STAT. § 3198(3)(d) (2010); ME. REV. STAT. tit. ALASKA STAT. § 34.70.090(d) (2010); HAW. REV. STAT. 33, § 174(5) (2010). § 508D-16(c) (2010); 765 ILL. COMP. STAT. 77/25 (2010); NEB. 253 ALASKA STAT. § 34.70.070 (2010); CAL. CIV. CODE REV. STAT. § 76-2,120(12) (2010); NEV. REV. STAT. § 113.150(4) §§ 1102.1(a), 1102.8, and 1102.13 (West 2010); HAW. REV. (2010); OKLA. STAT. § 60-837(D) (2010); S.C. CODE ANN. § 27- STAT. § 508D-14 (2010); IDAHO CODE § 55-2514 (2010); 765 ILL. 50-65 (2010); S.D. CODIFIED LAWS ANN. § 43-4-42 (2010).
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28 erty to another buyer or transferee, possibly because material to the transaction is erroneous or inaccurate or of the effect of airport noise. omits information. Section 9(d), which is consistent with several state disclosure laws, permits a buyer to recover attorney's B.11. Seller's Compliance as Precluding Liability for fees and costs. Airport Changes After Final Settlement Section 9(e) preserves any other rights and remedies A seller who complies with Sections 4, 5, and 6 has that a buyer may have under state law. For example, no liability to a buyer regardless of any change in an although a seller may make the required airport dis- airport, including its operations, flight paths, or noise, closure, the seller could accompany the disclosure with occurring after final settlement. misrepresentations or conceal information known only to a seller regarding an airport's impact on the prop- Comment erty. However, consistent with several current disclo- sure laws, some states may prefer that the Act's Section 11 is intended to protect a seller from any remedies supersede all other rights and remedies un- claim arising out of a change in an airport, including der state law.256 airport-related noise. However, some states may want 257 to require a seller to disclose to a buyer whatever B.10. Limitation of Seller's Liability the seller knows at the time of the buyer's offer A seller is not liable for any error, inaccuracy or regarding an airport's plans that may affect the air- omission of any material information provided by a port's future size, operations, or flight paths. If so, a government or governmental agency or by an airport or state may want to provide also that a seller has to act airport authority on which a seller relied when comply- in good faith, which in many states means honesty-in- ing with Sections 4, 5, and 6 of this Act as long as the fact.259 error, inaccuracy or omission was not within the actual knowledge of the seller.258 B.12. Waiver Prohibited260 (a) The requirements of this Act may not be waived, Comment orally or in writing, by a buyer of residential real prop- erty subject to this Act. Section 10 is intended to protect a seller who has re- (b) Any waiver signed by or on behalf of a buyer is lied on material information provided by a government void ab initio. or governmental agency or by an airport or airport au- thority that proves to be erroneous, inaccurate, or in- Comment complete. The section is similar to existing disclosure laws that provide that a seller has no liability for in- Section 12 is the opposite of disclosure laws in a formation supplied by the government when the seller majority of states (that address the issue) that permit has no actual knowledge that the information that is a buyer to waive a disclosure act's requirements. Allow- ing a waiver of an airport disclosure act could under- mine the Act's effectiveness as sellers or their brokers 256 OKLA. STAT. § 60-638(F) (2010). or agents could include a standard waiver in real estate 257 ALASKA STAT. § 34.70.030 (2010); CAL. CIV. CODE contracts to avoid disclosing an airport to a prospective § 1102.9 (West 2010); DEL. CODE ANN. tit. 6, §§ 2575(1) and (2) buyer. Nevertheless, some states may want to allow a (2010); HAW. REV. STAT. § 508D-13 (2010); PA. CONS. STAT. tit. buyer to waive the protection of an airport disclosure 68, § 7314 (2010); VA. CODE ANN. § 55-521(B) (Michie 2010). act. 258 CAL. CIV. CODE § 1102.4(a) (West 2010); CONN. GEN. STAT. § 20-327c (2010); GA. CODE ANN. § 10-6A-5(b)(2) (2010) (applicable to brokers); HAW. REV. STAT. § 508D-9(1) (2010) 259 (stating "[f]acts based on only the seller's personal knowledge"); ALASKA STAT. § 34.70.060 (2010); CAL. CIV. CODE IDAHO CODE § 55-2507 (2010) ("actually known by the trans- § 1102.7 (West 2010); HAW. REV. STAT. § 508D-7 (2010) (requir- feror"); 765 ILL. COMP. STAT. 77/25(b) (2010) ("The seller shall ing "good faith and due care"); IDAHO CODE §§ 55-2507(5) and disclose material defects of which the seller has actual knowl- 55-2516 (2010) (stating that "good faith means honesty in edge."); IND. CODE ANN. § 32-21-5-11(a) (Burns 2010); LA. REV. fact"); LA. REV. STAT. ANN. § 9:3198B.(1) (West 2010); MICH. STAT. 9:3198E.(2) (2010); ME. REV. STAT. ANN. tit. 33, ch. 7, § COMP. LAWS § 565.960, § 10 (2010); MINN. STAT. § 513.55, 177(1); MD. CODE §§ 10-702(e)(2)(viii) and 10-702(e)(3)(iv)(1) Subd. 1(b) (2010); MISS. CODE ANN. § 89-1-511 (2010); Ohio and (2) (2010); MICH. COMP. LAWS § 565.955, REV. CODE ANN. § 5302.30 (Baldwin 2010) (good faith meaning § 5(1) (2010); MINN. STAT. § 513.57, Subd. 1 (2010); MISS. CODE "honesty in fact"); S.D. CODIFIED LAWS ANN. § 43-4-41 (2010). 260 ANN. § 89-1-505 (2010); NEB. REV. STAT. 76-2,120(8) (2010); CAL. CIV. CODE § 1102(c) (West 2010) (stating that "[a]ny NEV. REV. STAT. § 113.150(5)(a) (2010); N.C. GEN. STAT. § 47E- waiver of the requirements of this article is void as against 4 (2010); OHIO REV. CODE ANN. § 5302.30(F)(1) (2010); OKLA. public policy"); MD. CODE ANN., REAL PROP. § 10-702(K)(1) STAT. §§ 60-833(B)(1) and 60-835(C) (2010); PA. CONS. STAT. (2010) (stating that "[t]he rights of a purchaser under this sec- tit. 68, § 7309(b) (2010); R.I. GEN. LAWS §§ 5-20.8-2(a) and 5- tion may not be waived in the contract of sale and any at- 20.8-9 (2010); S.C. CODE ANN. §§ 27-50-40(B) and (C) (2010); tempted waiver is void"); WASH. REV. CODE § 64.06.010(7) TENN. CODE ANN. §§ 66-5-204(a) and (b) (2010); VA. CODE ANN. (2010) (stating that "the buyer may not waive the receipt of the § 55-521(A) (Michie 2010); WASH. REV. CODE § 64.06.050(1). `Environmental' section of the seller disclosure statement").