Is a Grave or Graveyard a Material Fact?
This “mandatory” disclosure of the presence of a graveyard on a property falls within the law of agency. The common law of agency requires every real estate agent to disclose material facts. Material facts are any facts that might affect the principal’s decision in a transaction. Further, in North Carolina, License Law requires that a real estate agent must disclose material facts to any party to the transaction. That would include the buyer, the seller, the agents, the attorney’s, mortgage lender, insurance companies, etc.
Material Facts in a Real Estate Transaction
So what are material facts in a real estate transaction? They are:
- Facts about the property itself
- Facts relating directly to the property
- Facts relating directly to the ability of the agent’s principal to complete the transaction
- Facts known to be of specific importance to a party
Facts about the property itself would include items like a structural defect, leaky roof, bad plumbing, etc.
Facts that relate directly to the property would include a pending zoning change, existence of restrictive covenants, new highway construction (like the south I-540 loop), airport noise, etc.
Facts that relate directly to the ability of a principal to complete the transaction would include facts like a buyer must sell current home before closing (we use the Contingent Sale Addendum to do this), the inability of buyer to obtain a loan, or the seller has been notified of the commencement of foreclosure process on his home.
Facts that are known to be of special importance to a party would include the fact that a buyer does not want a home with septic tank, or the fact that the protective covenants say that a property may not be used for home business. So why is the presence of a grave or graveyard a material fact? Gravesites located on a property are considered a material fact, in part because of other statutes which may allow the decedent’s progeny to have access to the property for purposes of periodically paying their respects to their forebear(s).
How should an agent disclose this information?
As far as I know there is not a NCAR form to use to provide graveyard disclosures. I would first check if the grave or graveyard is noted on the deed. If so, I would include a copy of the deed in the TMLS documents and note the fact in the agent remarks section. I would also be sure every buyer is sent a copy of the deed when an offer is submitted. The NCREC wants every agent (and the firm) to have a copy of the deed to property being listed or purchased in their transaction file. I would also recommend that the seller check paragraph 27 on the Residential Property Disclosure Form and then provide an explanation.