October 14, 1993
Mr. John L. Ackman, Jr.
Kentucky Real Estate Commission
10200 Linn Station Road, Suite 201
Louisville, Kentucky 40223
Dear Mr. Ackman:
By way of previous correspondence and telephone conversations you, on behalf of the Kentucky Real Estate Commission, hereafter the Commission, have requested to be provided with an opinion ". . . on whether individual companies or boards of realtors can include additional matter above and beyond those included on the form adopted by the Commission under KRS 324.360."
Under the pertinent provisions of KRS 324.360:
(2) The commission shall promulgate an administrative regulation authorizing a 'seller's disclosure of conditions form.'
(3) The form shall provide for disclosure by the seller of the following:
(a) Basement condition and whether it leaks;
(b) Roof condition and whether it leaks;
(c) Source and condition of water supply;
(d) Source and condition of sewage service;
(e) Working condition of component systems; and
(f) Other matters the commission deems appropriate.
The above-cited statute was adopted by the 1992 General Assembly. In April of 1993, the Commission received final approval on 201 KAR 11:350 which sets forth the seller disclosure form to be used by persons licensed under KRS Chapter 324 when they receive compensation for their services which involve the sale of residential real property. According to the regulation, the physical condition of the basement, roof, water supply, sewage service, plumbing, electrical heating and cooling systems must be disclosed by the seller on the form set forth in the regulation. In addition, the regulation requires the form to include the following sentence:
THE SELLER MAY DISCLOSE ADDITIONAL INFORMATION NOT REQUESTED OF THIS FORM AND MAY RESPOND TO ADDITIONAL INQUIRIES OF THE BUYER.
In comparing the provisions of KRS 324.360(2) and 201 KAR 11:350, the Commission chose to require a seller to divulge only the physical condition of those items of a house which are mentioned in the statute. However, in the regulation the Commission allows a seller to disclose additional information not requested by the form if he so chooses. In other words, the Commission does not require a seller to disclose any physical conditions of a house which are in addition to those set forth in the statute.
In response to the form described in the regulation, you have indicated that some local boards of realtors have inquired whether they could add some questions regarding the physical condition of the home to the back of the form.
As previously stated, the General Assembly, pursuant to KRS 324.360, requires that all persons licensed under Chapter 324 who receive compensation for sales and purchases involving residential real estate in this state must have their client, if he is selling real estate, complete the disclosure form described in the statute and accompanying regulations. In addition, the statute authorizes the Commission, but no other state or local agency or group, to add conditions to the form that it "deems appropriate."
In response to this authorization, the Commission chose not to require a seller to disclose any conditions in addition to those set forth in the statute. Instead, the Commission, in its regulation, authorized a seller, if he or she so chooses, to disclose any additional information which was not requested in the form, and he or she could respond to additional inquiries of the buyer. Nowhere in the statute was any authority given by the General Assembly to any entity other than the Commission to determine what information, in addition to that required by the statute, must be included on the disclosure form. Even though the Commission chose not to exercise that authority, that authority does not then pass from the Commission to any other state regulatory agency or a private association of realtors.
Therefore, since the General Assembly did not authorize the addition of any information to the seller disclosure form by any public or private entity, other than the Commission, no such additions may be placed on the form by any local board of realtors. This decision does not prohibit a private association involved with the sale of real estate to adopt a seller disclosure form which could be used in conjunction with the Commission's form. However, sellers could not be required by KRS 324.360 or the accompanying regulation to complete the form.
Richard C. Carroll
Assistant Attorney General