LREC Revises Property Disclosure Document
Amy P. Fennell • January 5, 2018
Louisiana REALTORS® worked with the Louisiana Real Estate Commission (LREC) on changes to the Residential Property Disclosure form following a recent Louisiana Supreme Court decision. The revised form is now finalized and available for use immediately, but will not be required to be used until March 1, 2018.
LR has prepared this Legal Line article highlighting key changes to the form. In addition to these articles, Louisiana REALTORS® is providing a clean copy of the new form and a “red-lined” version of the form so you can see what changes were made.
*the following documents are provided as reference to see the changes in the document. LREC website is the official location that the form should be downloaded from and used.
By: Patricia B. McMurray, JD | Baker, Donelson, Bearman, Caldwell & Berkowitz, PC
The Property Disclosure Document ("PDD") form required to be completed by all residential seller(s) has been revised by the Louisiana Real Estate Commission ("LREC").[1] Use of the new form is mandatory on March 1, 2018.
The LREC updated the PDD form partially in response to a decision by the Louisiana Supreme Court in a case which highlighted the possible ambiguity in completing the PDD form in choosing between the "no" or "no knowledge" selections on the existing form.[2] The revised PDD eliminates the choice of "no" and limits the seller's possible selections to "yes" or "no knowledge". All information about the property completed by the seller on the PDD form is completed "to the best of the seller's knowledge".
HIGHLIGHTS OF THE CHANGES TO THE PDD FORM
1. Property Disclosure Exemption Form
Page one of the PDD form is revised to be a "Property Disclosure Exemption Form". Certain sellers by law are exempt from the requirements to provide a PDD form to buyers. Those sellers claiming to be exempt from completing the PDD form should complete page 1 by selecting the exemption from the list of exemptions and completing the blank and signing page 1. The buyer also signs this page upon receipt of the PDD form.
All other sellers (those who do not claim an exemption to the requirement to complete the PDD form) should complete the following box on page 1. The buyer also signs this page upon receipt of the PDD form.
All buyers and sellers should initial each page of the PDD form, regardless of whether an exemption is claimed.
2. WARRANTY INFORMATION
Page two of the revised PDD form further explains that the PDD is intended to provide information about the property for the buyers and is not intended as a warranty of any kind. Buyers are encouraged to obtain inspections as they deem prudent. Added to the previous PDD information is the following notice:
This notice tracks the Louisiana statute.[3]
3. RESPONSE TO QUESTIONS ABOUT THE PROPERTY
All responses made by the seller on the form are to the "best of your (the Seller's) knowledge, information or belief."[4]
In order to eliminate potential confusion by the buyers that a "no" response to a question on the PDD was as an affirmation that that property did not have a certain defect as opposed to the seller did not know of such a defect in the property, the choice of "no" on the PDD form has been eliminated. The only response as to whether or not a "known defect"[5] to the property exists is "yes" or "NK" (not known). If the seller marks "yes", the seller should provide an explanation of the known defect. If the seller marks "NK", no explanation is required.
Although most of the questions on the form remain the same, some questions have been clarified or the order of the questions has been changed to better align the sections of the form.
4. ROAD HOME AND OTHER FEDERAL GRANTS AND LOANS
Other additional new sections on the PDD form is on page 4 and 5 regarding federal grants and loans. If a seller has been the recipient of federal grants, the requirements regarding these grants may provide restrictions on the property, such as the requirement to "obtain and maintain" flood insurance.[6] Sellers should take care to correctly complete this section to include the amount of the grant received.
OBTAIN AND MAINTAIN INSURANCE REQUIREMENTS
If the seller has been a recent recipient of these types of grants, a copy of the covenants and requirements should be provided to the buyer if possible.
DISCLAIMER
These materials are to be used for informational purposes and should not be construed as specific legal advice. These materials are not designed to cover every aspect of a legal situation for every factual circumstance that may arise regarding the subject matter included.
This publication is for reference purposes only and association members or other readers are responsible for contacting their own attorneys or other professional advisors for legal or contract advice. The comments provided herein solely represent the opinions of the authors and is not a guarantee of interpretation of the law or contracts by any court or by the Louisiana Real Estate Commission.
[1] The PDD form or a similar form is required to be completed by sellers of residential property pursuant to LSA-R.S. 9:3196 - 3200
[2] Valobra v. Nelson, 14-0164 (La. 04/11/14), 136 So. 3d 793
[3] La. R.S. 9:3198(c)
[4] Explanation supplied
[5] A "known defect" is a condition found within the property that was actually known by the seller and that results in any of the following: (a) has a substantial adverse effect on the value of the property; (b) significantly impairs the health or safety of future occupants of the property; (c) if not repaired, removed or replaced, significantly shortens the expected normal life of the premises.
The Louisiana REALTORS® Board of Directors will elect six (6) LR At-Large Directors at its October 1st meeting. Qualifications and an application for the position can be found below.
As previously noted in our 2026 legislative session update, HB 468 by Rep. Troy Hebert was adopted with no opposition and was effective August 1, 2026, as Act 807. The Act amends portions of the Louisiana Real Estate License Law (La. R.S. 37:1430, et seq.) to regulate the practice of wholesaling with respect to residential property. Specifically, the Act establishes newly defined terms of “residential real property”, “wholesaler” and “wholesaling” (La. R.S. 37:1431(35) through (37)) and enacts La. R.S. 37:1448.5 to specifically address wholesaling of residential real properties, including required disclosures, written agreements, notices and deposits and also provides for enforcement of the new law. The Act does not prohibit real estate wholesaling. Rather, there are certain requirements for “wholesalers” solely with respect to “wholesaling” of “residential real property.” Each of those terms are defined below. The intent is to make sure that sellers (homeowners) understand the true nature of the wholesaling transaction. To accomplish that, the law requires wholesalers to clearly disclose whether they intend to assign, transfer, or market any rights they have under a purchase agreement for financial gain. The wholesaler must prominently disclose that intent along with advising the seller to seek legal advice before signing each contract and that the seller has the right to cancel the wholesaling contract for any reason and without penalty for at least five calendar days after the execution of the contract. The law expressly requires that each wholesaling contract include the following: "NOTICE REQUIRED BY LOUISIANA LAW: You may cancel this contract at any time before 11:59 PM of [Insert Date]. [Insert Name of Wholesaler] CANNOT ask you to sign or have you sign any cash sale, conveyance or deed, or any other document until your right to cancel this contract has ended. See the attached notice of cancellation form for an explanation of this right. It is advisable that you find your own attorney before signing the contract. The law requires this contract to contain the entire agreement. You should not rely upon any other written or oral agreement or promise." The “notice of cancellation form” referenced above has been published by the Louisiana Real Estate Commission as the “Wholesaling Residential Real Property Mandatory Cancellation Notice” and can be found here . Failure to include that notice renders the contract void and terminable by the seller and in the event of such a termination due to failure to include the notice or other non-compliance by the wholesaler, the seller will receive the deposit. However, if the contract is terminated within the 5-day rescission period, the wholesaler receives the deposit in full. Notably, the Act requires a minimum deposit equal to at least 1% of the purchase price, with funds properly held in escrow, in all wholesaling transactions. In addition, wholesalers are also prohibited from: (a) acting or purporting to act on behalf of the seller whether pursuant to a mandate, power of attorney, or otherwise; (b) representing himself as holding any license or certification or being a member of a licensed profession without the license or certification; (c) placing any lien or other encumbrance on the property; and (d) engaging in any deceptive or unfair trade. Louisiana REALTORS ® is proud to have supported this Act to promote transparency and consumer protection in the real estate industry while allowing for continued investment in our communities through real estate transactions. Definitions: "Residential real property" means real property consisting of one or not more than four residential dwelling units, which are buildings or structures each of which is occupied or intended for occupancy as single family residences. "Wholesaler" means any person or entity that is either engaged in or intends to engage in the wholesaling of residential real property. "Wholesaling" means securing, negotiating, or facilitating the purchase or sale of residential real property with the purpose of transferring, assigning, or selling a contractual right to purchase or any other equitable interest in the residential real property, whether directly or indirectly, for financial gain. The marketing for sale of the contractual rights or other equitable interests constitutes a presumption that the person or entity marketing or selling the rights or interests is engaged in wholesaling. "Wholesaling" includes but is not limited to the following: (a) Entering into a contract to purchase residential real property with the intent of assigning or selling the contractual rights to another party before taking possession or legal ownership of such residential real property. (b) Simultaneously consummating or closing two separate transactions relative to the same residential real property, including one transaction with the original owner and seller of the residential real property and another transaction with the end buyer, without the purchaser providing all funds needed to close the sale transaction with the original owner and seller and without the intent to reside in, occupy, or otherwise materially improve the residential real property.
NAR is sharing its latest consumer guide, Seller Handoff Checklist . Sellers can create a smooth transition for the new owners using the new one-page guide. It offers a handy checklist of information and resources that sellers can pass along—from appliance manuals to paint colors to garbage pickup schedules—as well as suggestions for goodwill gestures that will help buyers feel they made a great purchasing decision. As a reminder, all guides in this series are available for download—in both English and Spanish—on facts.realtor . Please allow up to two weeks for the Spanish version of the latest resource to be translated and uploaded. For ease of reference, below is a list of the most recent guides: NEW: Seller Handoff Checklist Defining Home Buying Needs vs. Wants 10 Tips For Unpacking Smartly After A Move UPDATED: Multiple Listing Services Overcoming Roadblocks to a Sale or Purchase Thank you for your continued engagement with the “Consumer Guide” series and for sharing the resources with prospective clients to ensure they have the information they need to find success in their home buying or selling journey. Remember that these guides are for informational purposes only and are not meant to enact or change any existing NAR policy. Check out the next consumer guide on condominium insurance.
