Does anyone here have prospective buyers sign some type of liability release for inspecting a property that you own but have never physically been on?
@gaent yep, I do. This is one of many downloadable templates in the Land Investing Masterclass (see Module 6, Lesson 1), called the Disclosure Statement. In this 1-page form, the buyer is effectively saying that they've done all their own homework on the property and they aren't going to come back to the seller after-the-fact making demands or accusations about anything. By signing this form, the buyer is acknowledging that:
- They're buying the property as-is
- If they wanted a survey, it was their job to get one and pay for it before closing
- If they had any concerns about the suitability of the soil for their intended use, it was their job to pay for the necessary tests prior to closing
- If they have any concerns about the title, it's their job to get their own title insurance and get those issues resolved prior to closing
- They are releasing the seller from any liability, and they won't come back and cause them legal grief in the future
The idea behind this form isn't only to release the seller from liability, but also to make sure the buyer understands what they should be doing in their due diligence. If a buyer has a problem with signing this for some reason, that means they still have some research to do so they are comfortable signing it.
Disclaimer: I'm not an attorney. If you decide to use a form like this for any reason, you should have it reviewed and approved by an attorney to make sure it includes all the necessary items in it that are relevant to the area where you're working.
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@retipsterseth Thanks for the reply. My main concern, at this point, is somebody going onto the property to inspect it, getting hurt and then coming after me. Does your disclosure statement protect against things like this prior to the actual sale? Also, is this form available for purchase individually, similar to how I bought and downloaded the purchase agreement?
@gaent if that's your concern, then it sounds like you'd need hazard insurance for your land (which is pretty cheap in most cases). The disclosure statement isn't signed until the buyer is ready to pay you and close the deal, so if you're concerned about the inspection period, you'd probably want to look into getting an umbrella policy that covers the vacant land properties you currently own.
@retipsterseth What do you, or others do, when prospective buyers go to look at a property that you own? Do you let the LLC act as your defense, have an umbrella policy or just take your chances that there will be no accidents while the prospective buyer is on your property?
@gaent
When it comes to vacant land, I just been letting my LLC act as my defense.
People having accidents on a vacant land, especially when it's rural, residential and small (1 acre or less) is very rare. Even if someone did twist their ankle on your land, it would be even more rare for them to sue you for such an accident.
Don't get me wrong, I'm sure it's happened to someone before and it will probably happen again. There is some risk in the picture if you don't get insurance, but even so, we're talking about the lowest-risk type of real estate there is. If we only own each of these properties for a short period of time anyway, is it worth your time to mess around with putting insurance on and off each of these things individually? Maybe. Maybe not. That's for you to decide, but I know how I've decided to handle it.
We had some of this discussion over in this thread as well, if you want to check it out.
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@donyost Thanks for the input. The concern I have with a piece of property I have now is that there is an access road that, on one side, has a very steep drop-off and would not be good if someone was to accidentally trip or something.
@retipsterseth Is the Disclosure Statement you mentioned available for individual purchase? Also, does the purchase agreement I bought from your site work for selling a property as well?
@gaent it's not available separately, only as part of the course.
I'll tell you what though, I get a TON of requests for this one document, so I'll make it available here for free. You can make a copy of it to your Google Drive account through the link below. Enjoy!
Download the Disclosure Statement Here
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@retipsterseth Thank you so much, that is AWESOME! I just requested access through the google drive link.