A builder in Bowling Green, Kentucky, is selling a newly constructed home and provides the buyer with a one-year builder's warranty covering workmanship and materials. The buyer's agent asks whether the Kentucky Seller Disclosure form is also required. Which of the following best describes the applicable rule?
Correct Answer
B) The disclosure form is not required because new construction sales accompanied by a builder's warranty are exempt under KRS 324.360.
KRS 324.360 exempts new construction sales from the seller disclosure requirement when the builder provides a warranty. The rationale is that the builder's warranty serves a protective function similar to disclosure by giving the buyer assurance about the property's condition. When a builder's warranty accompanies the sale of new construction, the standard seller disclosure form is not required.
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Related Topics & Key Terms
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Related Concepts
An as-is clause in a real estate contract states that the buyer accepts the property in its current condition without requiring the seller to make any repairs. However, an as-is sale does NOT eliminate the seller's obligation to disclose known defects.
Asbestos disclosure involves informing buyers about the presence of asbestos-containing materials (ACMs) in a property. Asbestos was commonly used in construction materials before 1980 and poses health risks when fibers become airborne.
Violating fair housing laws can lead to significant penalties, including fines, civil liability, and professional discipline.
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