I know that when the seller of a home is an estate, it is exempt from providing a form 17 to the buyer. How is determined if the seller is an estate? For example: I am representing the buyers on a transaction. The listing in the MLS had the seller as the Smith Estate, and no Form 17. Once we received preliminary title back, we discovered that title was actually vested in Jim Smith, as successor Trustee of the Jane Smith Testamentary Trust. Both Jane and her husband are deceased, Jim is one of their children. For the purposes of determining if the seller is required to provide a Form 17 to the buyers or not, is this an estate sale?
A trust is not an estate and is not exempt from the Seller Disclosure Act. Although the situation may feel the same to this successor trustee as it would if the trustee were actually the personal representative of his parents' estate, the distinction is significant under the Seller Disclosure Act. Simply put, an estate that conveys title by the signature of a personal representative is exempt from the Seller Disclosure Act but when seller is a trust, the sale is not exempt. Unless this buyer waived the right to receive the Seller Disclosure Statement, it would appear that buyer is entitled to the Seller Disclosure Statement and has the right to rescind the purchase agreement for up to three days following receipt of the disclosure statement or until closing, whichever comes first.
If the parties cannot resolve this issue, broker should advise her client to seek legal counsel.
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