by
Blackwell M. Brogden, Jr.
Deputy Legal Counsel
The Real Estate Commission frequently receives letters and telephone calls from consumers complaining that real estate brokers and salesmen have made misrepresentations concerning the maintenance of subdivision streets. Sometimes the brokers and salesmen are the developers of the subdivision and sometimes they are acting as agents of the developer.
Did you know that if you have conveyed lots (either as a developer or grantor) in a subdivision that was created after October 1, 1975, you have an obligation to create streets that meet the standards of the North Carolina Department of Transportation? According to N.C.G.S. 136-102.5, "prior to entering any agreement or any conveyance with any prospective buyer, the developer and seller shall prepare and sign, and the buyer of the subject real estate shall receive and sign an acknowledgement of receipt of a separate instrument known as the subdivision street disclosure statement [emphasis added]." Furthermore, the disclosure statement
"shall fully and completely disclose the status (whether public or private) of the street upon which the house or lot fronts." Different certifications are required in the statement for private streets, public streets, streets inside municipal boundaries, and certain subdivisions abutting the lakes on the Catawba River.
Willful failure to comply with the statute is a misdemeanor and can also subject you to disciplinary action by the Real Estate Commission whether you are acting as a developer or as agent for the developer. Consequently, if you are responsible for advertising or selling lots in a subdivision which was created after October 1, 1975, you should make a thorough inquiry regarding the issues of road maintenance and distribution of disclosure statements. Furthermore, if you are acting as the developer of a subdivision, you should consult with legal counsel for assistance in preparing the disclosure statement.