Real Estate Agent and Trainer, Robert Rico, explains what the Megan’s Law Database Disclosure is, and why it’s important for sellers to disclose everything they know about a property. Do you want to see more video blogs? Subscribe here!
Welcome back to this week’s installment of the CA Realty Training blog. We’re covering an important topic today, so get your notebooks out!
Megan’s Law is a federal law, and shorthand for a series of state laws, that require convicted sex offenders to enter their names on a registry. Some states also require these offenders to notify their community when they relocate, actions considered part of SORN (Sex Offender Registration and Notification) laws. Megan’s Law was federally enacted from a patchwork of state laws after the tragic rape and murder of 7-year-old Megan Kanka, in 1994. Her killer was a neighbor and he had been previously convicted of sexual crimes against a minor, so the laws were passed to prevent a similar situation from happening again.
So, interesting information — but what does it have to do with a real estate career?
Let’s say you’re an agent dealing with buyers — it’s usually a very exciting time. They are finding the house of their dreams, you get to witness it, and people are usually happy when going through this transaction. They have found the right house, the offer is accepted, and escrow is opened! Escrow, as we’ve covered, is a legal and binding contract so it’s important that everything go smoothly. If a buyer is given a disclosure they don’t like, however, they have the right to cancel the escrow and get their earnest money deposit back — so it’s important to disclose everything up front. (See blog: What Can Go Wrong During Escrow?)
As a buyer, you want to ask for all disclosures and do all your due diligence before proceeding with any escrow. For example, one thing that many buyers like to check is the Megan’s Law website for their state. In California, it’s MegansLaw.ca.gov and the information is publicly available for people’s consumption. You can see where registered sex offenders live near any location you enter (for example, the new house you want to purchase) and make an informed decision about moving to that location.
However, there is another side to this. If you are representing the sellers, and they happen to have a sex offender move in next to them, is it really their fault for living there first? Is it fair that it immediately lower the value of their house or hurt their ability to resell it quickly? We don’t really think so, and neither does the state of California.
As we have covered many times in our blog, disclosures are absolutely KEY during any real estate sale. The state and federal laws are very strict and clear about what needs to be disclosed, and agents can get burned extremely badly when not following these disclosure laws. It’s important to remember, though, that you only have to disclose the information you know — you don’t have to do research beyond what you already know to be true. Therefore, a form was created: the Megan’s Law Database Disclosure form. This form lets the buyers know that there IS a website out there where they can check the proximity of sexual predators in the area. Therefore, the responsibility is not on the seller to look up any sexual offenders nearby – it falls on the buyer. When the buyers sign the disclosure form, they are saying that they are aware of the website and they are waiving their right to contest the findings — the escrow is proceeding.
Just like we always say (well, one of the many things we always say…), disclose, disclose, disclose! We can’t stress this enough. If there is anything out of the ordinary, the buyers have the opportunity to sue both the seller and the listing agent, so it’s important to not bury any facts.
Years ago, Rico had a wonderful client, a military man with an amazing family and a beautiful young baby. They were looking at a house in a cul de sac, which they thought would be a great place for their baby to grow up and play as a child. However, when they were doing their due diligence, they found out that a sexual offender lived down the street — right by the dream house they were thinking of purchasing. They were, understandably, very hesitant… what might happen if they lived next to this person?
Without Rico’s knowledge, the buyers actually did a great thing. Instead of just basing their decision on the website, they actually went and knocked on the house next door to where the offender lived. They asked the neighbors about the person online, any insight they had, and if they felt safe living in the neighborhood. In fact, though, the offender had actually moved out a few months prior! Therefore, Rico’s clients felt safe, they continued the escrow, and happily moved into their cul de sac dream home!
Great review this week, students! Tune in next week and don’t forget to subscribe!