A disclosure which warns a buyer they may be liable for additional tax obligations after the close of escrow is the:
Audio Lesson
Duration: 2:47
Question & Answer
Review the question and all answer choices
supplemental tax bill disclosure.
The supplemental tax bill disclosure (A) is incorrect because it addresses existing tax obligations based on property reassessment after purchase, not potential future tax liabilities from external factors.
title insurance notice.
The title insurance notice (B) is incorrect because it relates to protecting against defects in title and ownership issues, not tax obligations that might arise after closing.
military airport expansion disclosure.
methamphetamine contamination notice.
The methamphetamine contamination notice (D) is incorrect because it addresses health and safety hazards related to property contamination, not potential tax liabilities.
Why is this correct?
The military airport expansion disclosure (C) is correct because it specifically warns buyers about potential future tax liabilities that may arise if military operations expand near the property, which could increase property taxes or create special assessments after escrow closes.
Deep Analysis
AI-powered in-depth explanation of this concept
Agency disclosures form a critical component of real estate practice, particularly in California where consumer protection laws are stringent. This question tests your understanding of specialized disclosures that may impact a buyer's financial obligations post-transaction. The core concept involves recognizing which disclosure specifically warns about potential tax liabilities after closing. The correct answer, military airport expansion disclosure, addresses situations where a buyer might face increased property taxes if military operations expand near the property. This differs from standard tax disclosures which address known obligations, not future potential ones. The question challenges students because it requires knowledge beyond basic disclosures and involves understanding how external factors like government operations can create future liabilities. This connects to broader real estate knowledge about environmental and governmental disclosures that affect property value and ownership costs.
Knowledge Background
Essential context and foundational knowledge
California requires various disclosures to protect buyers from unknown property issues. The military airport expansion disclosure specifically addresses situations where properties near military installations might face increased tax obligations if military operations expand. This disclosure helps buyers make informed decisions about potential future costs that could affect property value. The requirement exists because military expansion can significantly impact surrounding properties through noise, restricted airspace, and increased demand for services, potentially leading to higher taxes or special assessments.
Think of military airport expansion disclosure like a 'future tax forecast' – just as a weather forecast predicts coming weather, this disclosure predicts potential coming tax changes.
When you see a question about future tax obligations, associate it with forecasting rather than current assessment.
When questions mention future tax liabilities after closing, look for disclosures related to external factors like government operations or planned expansions, not standard property tax assessments.
Real World Application
How this concept applies in actual real estate practice
A buyer is interested in purchasing a home near a military base. Their agent provides the military airport expansion disclosure, explaining that the base has announced plans to expand operations. The disclosure warns that this expansion could lead to increased local taxes to fund additional services for military personnel and their families. The buyer, while initially hesitant, understands this potential future cost and proceeds with the purchase, factoring in the possibility of higher taxes when budgeting for homeownership.
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