While there have been several tips and hotline questions on the SPDS in the past, the concept is such a regular topic on the Legal Hotline that it bears repeating some information. The Seller Property Disclosure Statement is a creation of Oregon law. ORS 105.464 creates the “substantial” form of the disclosure, essentially pre-printing all the questions and provisions of the SPDS. Form providers will not deviate from the text of ORS 105.464 very far because doing so will make the disclosure form noncompliant with Oregon law. ORS 105.475 creates the right to “revoke the buyer’s offer” up to five days after delivery of the SPDS, which oftentimes means the Buyer is able to “revoke” an offer despite already being under contract. Normally this wouldn’t be allowed under contract law principles, but the Oregon Legislature created this special fast track termination right in 1993 as part of the SPDS and legislated law overcomes default practices of law. This “revocation” of the offer allows the Buyer to undo the transaction, and grants Escrow a special right to ignore the normal ORS 696.581 requirement that both parties provide matching escrow instructions. Escrow is allowed to simply disburse the earnest money upon Buyer’s revocation.
There is oftentimes a disconnect between common law disclosure standards and the SPDS laws that can create a confusion among practitioners. As a baseline, sellers must disclose material facts that they know about the property [excepting the stuff in ORS 93.275]. If the Seller fails to disclose these items, there’s a chance they are concealing material facts and could be sued for misrepresentation or fraud or worse. [E.g. a Seller knows that the back porch steps are rotting away and knows that the third step is dangerously weakened but tells nobody. If there is a broken leg stemming from that rotting step that could have been prevented by Seller disclosure, Seller is potentially going to be responsible for the injury. If Seller was halfway through the sale transaction and learned about the dangerously rotting stair, they would still be obligated to disclose the information to avoid being sued.] When the Seller discloses a changed fact, the contract isn’t terminated, the Buyer really doesn’t gain a sudden right to end the contract [the Buyer can potentially terminate if their original purpose is “frustrated, impossible or impracticable,” but that’s more a context specific argument of law]. The SPDS, on the other hand, is a “point-in-time” disclosure of the things that Seller knows at the time they send over the SPDS. Under statute, it is a one-time disclosure that merely needs to reflect the Seller’s understanding that very moment. If, later on, something changes that would render the SPDS inaccurate, there is nothing in statute that requires the Seller to update the SPDS. The Seller may need to disclose the information to avoid common law misrepresentation and concealment lawsuits, but that common-law disclosure obligations do not mandate a resubmission of the SPDS nor do they create a right of revocation that escrow can unilaterally rely on.
If the Seller does send a new version of the SPDS form, the document itself, per ORS 105.464, states “If the Seller has filled out section 2 of this form, you, the Buyer, have five days from the Seller’s delivery of this Disclosure Statement to revoke your offer by delivering your separate signed written statement of revocation to the Seller disapproving the Seller’s disclosure.” In other words, sending an amended SPDS reestablishes the five-day revocation period through the terms of the SDPS itself. A Seller should think carefully before resending an SPDS disclosure on the SPDS form; sometimes a disclosure by email is all that is needed.