Is New Disclosure Statement Required Ror Vacant Land Sales?
QUESTION: I have been familiarizing myself with the new Mineral and Oil and Gas Rights Mandatory
Disclosure Statement. In paragraph 2 of the instructions on the first page, it says that a Disclosure Statement is
not required for some transactions and it refers to the statutes that set forth the exemptions. I have reviewed the
exemptions and I am confused about one thing: I’ve heard that the new Disclosure Statement does not have to
be provided by owners of vacant land, but I don’t see vacant land sales listed in the exemptions. Is what I am
hearing correct? If so, why aren’t vacant land transactions listed in the exemptions?
ANSWER: First of all, it is true that the new Mineral and Oil and Gas Rights Mandatory Disclosure Statement
does not have to be provided by owners of unimproved property.
The answer to your second question requires a bit of statutory interpretation. You are correct that the
exemptions cited in the Disclosure Statement instructions do not mention vacant land transactions. The purpose
of the exemptions section is to exempt certain transactions that would otherwise be subject to the requirements
of the Residential Property Disclosure Act (the “Act”). However, the Act only applies to certain “transfers of
residential real property consisting of not less than one nor more than four dwelling units” (see G.S. 47E-1).
Since vacant land does not contain a dwelling unit, the Act doesn’t apply to transfers of vacant land in the first
place, and thus, there is no reason to list vacant land transfers in the exemptions section of the Act.
I n our view, there is no logical reason why the new Disclosure Statement should not also have to be provided
by sellers of vacant land. However, when the General Assembly first decided in 2012 to require oil and gas
rights disclosure, it used the Residential Property Disclosure Act as the vehicle for imposing the new
requirement. Since, as noted above, the Act doesn’t apply to transfers of unimproved land, the oil and gas rights
disclosure requirement (which has now been expanded to include mineral disclosure) doesn’t apply to such
transfers.
NCAR provides articles on legal topics as a member service. They are general statements of applicable legal and ethical
principles for member education only. They do not constitute legal advice. If you or a client requires legal advice, the
services of a private attorney should be sought. Always consult your broker-in-charge when faced with a question
relating to the practice of real estate brokerage.
© Copyright 2015. North Carolina Association of REALTORS®, Inc. All rights reserved. No reproduction of any part
may be made without the prior written consent of the copyright holder. Any unauthorized reproduction, use, disclosure
or distribution is strictly prohibited.
