Legal Update – New Fair Housing Disclosure Form Available

The new Fair Housing Disclosure form pursuant to Public Act 16-16 is now in effect and available on the Connecticut Commission on Human Rights and Opportunities (CHRO) site and may be accessed here. The statement of purpose of the Bill that passed is “To provide prospective owners of multifamily residential properties with conspicuous notice of federal and state fair housing laws.”

Under the law, which the Connecticut Legislature passed this past session, on or before July 1, 2016 the CHRO must draft and post on their website a Disclosure on state and federal fair housing laws and housing discrimination. Sixty days after CHRO makes this form available online, this Disclosure form must be signed at the closing by the purchaser(s) and attached to the Purchase and Sale Agreement.

This new Disclosure form should be provided at the time of closing by the attorneys involved in the transaction. REALTORS® may wish to inform their clients to expect this new Disclosure at the closing if the transaction is for a property with two or more residential units. However, there is no legal obligation for real estate licensees to provide this disclosure form prior to or at closing.

As a reminder, this Disclosure only applies to multifamily properties being purchased or exchanged that have two or more residential units. This Disclosure still applies regardless of purchaser’s intentions to rent the property or not, and regardless of whether the purchaser will occupy the property themselves. The Disclosure does not apply to the purchase or exchange of land, or single family residences, which includes single family homes, a single condo unit, or a single apartment.

This law does not apply to rental transactions where the property is just for rent. However, the law does apply to options, and to leases containing an option to purchase, where the subject property contains two or more residential units. In these transactions, the Disclosure must be signed by the purchaser and attached to the option contract, or lease with purchase option contract at “the time of closing.”

The law does not specify what the penalty will be for failure to provide the document at closing, but it does expressly state that it “shall not void an otherwise valid purchase agreement, option or lease containing a purchase option.” Thus, it will not cancel the contract or the transaction as a whole because the Disclosure is not attached. There is also no language in the bill which prohibits it from being used in other non-applicable transactions, such as in rentals or the sale of single family homes, or from being used before its effective date. Thus, if your clients or the attorneys wish to use it for every transaction, there is no prohibition or penalty for doing so.

The full text of the bill can be found at this link.